Stocks gain for fifth session following inflation report, Clear Channel buyout

NEW YORK — Stocks gained for a fifth straight session and the Dow Jones industrials achieved their third straight record close Thursday after the Labor Department said falling gas prices helped push inflation lower last month, bolstering the notion that the economy can slow enough to allow the Federal Reserve to eventually lower interest rates.

A plunge in oil prices, which raised the prospect of even lower inflation, contributed to the advance.

The market rose as investors took their cues from the inflation news and indications that a flurry of private equity buyouts would continue, this time with offers for radio station owner Clear Channel Communications Inc. and Reader's Digest Association Inc., the magazine publisher and direct marketer.

Stocks also gained after the Philadelphia Fed reported that its index of manufacturing conditions rose to 5.1 from negative 0.7 in October. A positive reading signifies growth. Regional economic conditions "improved slightly" in November, but indicators for new orders and employment weakened.

Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc., contends that while the overall economy could show strains, stocks are poised to continue rising because of the strength of profits and balance sheets at corporations.

According to preliminary calculations, the Dow Jones industrial average rose 54.11, or 0.44 percent, to 12,305.82. The Dow has closed at record levels 17 times since the start of October and again set a new trading high of 12,325.91 Thursday, passing the 12,300 mark for the first time.

Broader stock indicators also managed gains. The Standard & Poor's 500 index rose 3.19, up 0.23 percent, to 1,399.76, and the Nasdaq composite index gained 6.31, or 0.26 percent, to 2,449.06. The S&P is at a six-year high, while the Nasdaq is near a six-year high.

Financials and the consumer discretionary sectors led the advancers, while energy stocks moved lower as commodity prices fell. Light, sweet crude was down $2.50 at $56.26 on the New York Mercantile Exchange.

Bonds fell sharply, with the yield on the benchmark 10-year Treasury note rising to 4.66 percent from 4.62 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices fell.

In economic news, the 0.5 percent drop in the Consumer Price Index, the key measure of inflation, matched the decline in September and marked the first two-month drop since late last year. The core inflation figure, which strips out volatility-prone prices for food and energy, rose 0.1 percent, the smallest increase in eight months.