US stocks rose for a fifth straight day on Thursday as investors bet that a sharp slide in crude oil prices would boost profits and could even prompt the Fed to cut interest rates sometime next year following data that showed tamer consumer prices.
A burst of deal news, including Clear Channel Communications Inc's proposed $18.7 billion buyout, helped push the Dow Jones industrial average above 12,300 for the first time ever - marking its 17th record close since the start of October.
The blue chip Dow average achieved its longest winning streak since August as investors snapped up shares of industrial companies such as Boeing Co. The S&P 500 jumped to a six-year intraday peak at 1,403.76 and the Nasdaq climbed to 2,453.35, its highest since February 2001. For the Nasdaq, this marked its longest series of gains since September.
Before the opening bell, the government reported that the overall US Consumer Price Index dropped much more than expected and the core CPI, excluding volatile food and energy prices, rose just 0.1 percent - or half the gain that Wall Street expected.
"The CPI number is supportive of the idea that there will be very little pressure on the Federal Reserve to raise interest rates and it would probably allow them to begin lowering rates at some point next year," said Michael Malone, trading analyst at Cowen & Co in New York.
"The crude drop removes inflationary pressures on the economy and also contributes to consumer confidence. The combination of those two things is good, particularly as we go into the holiday season. It bodes well for the economy."
The Dow Jones industrial average rose 54.11 points, or 0.44 percent, to end at a record 12,305.82. The Standard & Poor's 500 Index gained 3.19 points, or 0.23 percent, to finish at 1,399.76. The Nasdaq Composite Index added 6.31 points, or 0.26 percent, to close at 2,449.06.
Oil tumbled 4.3 percent to its lowest point in almost a year as dealers focused on swelling US crude stockpiles and forecasts of a mild winter in the world's top oil-consuming nation, the United States. US crude for December delivery fell $2.50 to settle on the New York Mercantile Exchange at $56.26 a barrel, the lowest settlement since November 18, 2005.
A cut in interest rates would help lower corporate borrowing costs, bolstering prospects for a continued rise in earnings. After the bell, shares of Hewlett-Packard Co jumped almost 1 percent to $40.51 after posting a quarterly net profit that more than quadrupled from a year ago, beating estimates. Hewlett-Packard shares ended regular trading at $40.16, up almost 1 percent, or 37 cents, on the New York Stock Exchange.
During the regular session, Boeing Co led the Dow industrials higher for a second straight day as investors bet that the large US jet aircraft manufacturer was poised to win multibillion-dollar plane orders in the coming weeks. Boeing shares shot up 1.9 percent, or $1.63, to finish at $88.71 on the NYSE.
Shares of Apple gained along with those of software maker Microsoft Corp after an industry group forecast semiconductor sales will rise sharply through 2009 on strong consumer demand for personal computer memory and electronic products such as music players. The semiconductor index rose 0.44 percent.
Apple shares gained 1.9 percent, or $1.56, to $85.61, while shares of Microsoft advanced 1.2 percent, or 35 cents, to $29.47. Apple ranked No 1 among the stocks boosting the Nasdaq 100 and Microsoft ranked second. But Dell's shares dropped 2.5 percent, or 65 cents, to $25.10 after the company said it was delaying its quarterly earnings report as the US Securities and Exchange Commission stepped up a probe into its accounting.
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