Dow Overcomes the Negatives

Shares of Circuit City plunged 16.5% on its disappointing third-quarter results, which suffered because of intense price competition among its competitors. Shares of Best Buy(BBY Quote), which recently reported disappointing margins, slipped 1.6% Tuesday.

Sending the Dow to new highs were gains of 2% or more by shares of Honeywell(HON Quote) and ExxonMobil(XOM Quote). Pfizer's(PFE Quote) shares gained 1.4% even as the company suffered a credit-rating cut from top-rated triple-A to Aa1 by Moody's Investors Service. Investors were instead cheering Pfizer's announcement late Monday to increase its dividend by 21%, or five cents per share.

The U.S. stock market largely shrugged off the 15% decline in the Thai SET, and the drops of more than 1% in the benchmark indices in Hong Kong, Russia, Mexico, Malaysia, Indonesia, Hungary and India.

The Thai government reversed its decision to impose currency controls on stocks within 24 hours. But Tuesday's SET slump and the motives behind the currency controls are a reminder of how unpredictable the moves of emerging market governments and regulators can be. It is a lesson in how fast hot money can move out of a market, and that risk really does exist.

Thailand imposed the controls to keep out speculators and reduce the upward pressure on the baht, which had jumped 16% thus far this year. Thai exporters, like exporters in many emerging market countries where hot money has driven up currency valuations, have complained that they can't sustain themselves with such strong currencies.