Dow Sets New Standard

Ian Shepherdson, chief economist with High Frequency Economics, said that prices were expected to fall after declines in auto prices, but the market didn't account for such an abrupt downshift.

"Prices can fall further over the next few months," Shepherdson said. "Elsewhere, the core numbers are soft more or less everywhere except housing, where rents rose on trend and lodging costs rebounded. Inflation is fading fast. The Fed can safely ease to boost growth."

A separate report said that November production at utilities, factories and mines rose 0.2%, ahead of forecasts for no change. Capacity utilization was 81.8%, slightly below the consensus estimate.

Following the economic data, Treasuries were steady. The 10-year note was unchanged in price to yield 4.59%. The 30-year bond was flat, yielding 4.71%. The dollar was higher against the euro and the yen.

Also playing a role in the session was the simultaneous expiration of four different derivatives. Trading for the last day were stock index futures, stock index options, stock options and single stock futures. The expiration of all four contracts, referred to as quadruple witching, happens quarterly.

Stocks in the news included Dell (DELL Quote), which said after the prior session's close that it would delay its 10-Q quarterly filing with regulators because of a probe into its accounting. Dell lost 34 cents, or 1.3%, to $26.53.

Similarly, Apple (AAPL Quote) will need more time to file its annual report as it continues a review of its options accounting. The company said in a regulatory document that it's working on a restatement of its past compensation expenses. Shares of Apple were off 83 cents, or 0.9%, to close at $87.72.

Also after the close, Home Depot (HD Quote) revealed plans for a $3 billion accelerated share buyback, and Bear Stearns (BSC Quote), whose strong earnings this week continued a trend for investment banks, boosted its repurchase authorization by $500 million to $2 billion.

Dow component Home Depot finished lower by 0.2% to $39.89. Bear Stearns added 2.3% to $163.68.

Elsewhere, shares of Black & Decker (BDK Quote) sank 10% after the tool maker dropped its fourth-quarter earnings and revenue outlook, citing a decline in orders from key retailers. Shares slid $8.66 to $78.26.

Oil prices were again higher, surging by 92 cents to $63.43. Crude futures strengthened Thursday after OPEC said it would probably further cut production, this time by half a million barrels a day, early next year.

A few weeks ago, the world's biggest oil-exporting group said it was reducing output by 1.2 million barrels, but analysts don't believe the curtailment has actually been that pronounced.

Overseas, European markets were moderately higher. London's FTSE 100 was up 0.5% to 6260, and Frankfurt's Xetra DAX added 0.6% to 6589. Asia's shares rose overnight. The Nikkei gained 0.5% to 16,914, and the Hang Seng added 1.1% to 19,110.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting