Wall Street scored a fifth straight gain and the Dow Jones industrials achieved their third straight record close Thursday after the Labor Department said falling gas prices helped push inflation down last month. Oil prices that plunged to their lowest level in a year added to the advance.

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The Dow 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 12,300 for the first time.

Broader stock indicators also managed gains. The Standard & Poor's 500 index rose 3.19, or 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.

The inflation report, and the prospect of a further decline as oil prices dropped, bolstered the notion that the economy could slow enough to allow the Federal Reserve to eventually lower interest rates.

Though stocks moved higher overall, advancing issues outnumbered decliners by a margin of only 6 to 5 on the New York Stock Exchange, suggesting some investors are concerned the market could be overbought. Nonetheless, investors took their cues from the inflation news and indications that a flurry of private equity buyouts would continue, with deals announced for Clear Channel Communications Inc. (CCU) and Reader's Digest Association (RDA) Inc.

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.

Financials and the consumer discretionary sectors led the advancers Thursday, while energy stocks moved lower as commodity prices fell. Light, sweet crude settled down $2.50 at $56.26 on the New York Mercantile Exchange as traders focused on the drop in demand a slowing economy could bring rather than production cuts, which could support prices.

Bonds fell sharply, with the yield on the benchmark 10-year Treasury note rising to 4.67 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.

The Labor Department also reported the number of Americans seeking unemployment benefits fell by 2,000 to 308,000 last week, the smallest reading in a month. Last month, the nation's unemployment fell to a five-year low.

Stocks 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.

"It's much too early to declare victory over inflation," Harris said. "You've got a significant amount of labor cost pressure building. Labor costs are a double whammy for stocks because they can slice into earnings and they can mean a tougher Federal Reserve."

Kim Caughey, equity research analyst at Fort Pitt Capital Group, also remains concerned about wage increases but notes that third quarter profits were generated when energy costs were higher. Crude hit its high for the year in July.

"I think these numbers validated the thesis about energy prices having been the main component of inflation early this year," she said of the Consumer Price Index.

In corporate news, Clear Channel, the country's No. 1 owner of radio stations, agreed to be taken private for about $18.7 billion by an investment group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC. The deal includes about $8 billion in debt. Clear Channel rose $1.24, or 3.6 percent, to $35.36.

Reader's Digest, the magazine publisher and direct marketer, rose $1.19, or 7.6 percent, to $16.70 after agreeing to be acquired for about $1.61 billion by an investment consortium led by private equity group Ripplewood Holdings LLC.

Dell Inc. (DELL) fell 65 cents, or 2.5 percent, to $25.10 after the computer maker delayed its third-quarter earnings report and announced federal regulators had launched a formal investigation into the company. Dell said it didn't know the specific nature of the investigation.

Also, dragging on the Nasdaq, Applied Materials Inc. (AMAT) fell 67 cents, or 3.6 percent, to $17.98 after the maker of semiconductor manufacturing equipment reported a weaker-than-expected fiscal fourth-quarter revenue and earnings.

KBR Inc., a unit of Halliburton Co., opened for trading following its initial public offering and jumped $3.75, or 22.1 percent, to $20.75. Car rental company Hertz Global, which also debuted Thursday, was up 72 cents, or 4.8 percent, at $15.72.

The Russell 2000 index of smaller companies was down 1.21, or 0.15 percent, at 790.75.

At the New York Stock Exchange, consolidated volume came to 2.83 billion shares compared with 2.93 billion traded Wednesday.

Overseas, Japan's Nikkei stock average closed down 0.49 percent. Britain's FTSE 100 closed up 0.40 percent, Germany's DAX index was up 0.19 percent, and France's CAC-40 was down 0.11 percent.

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