Stocks closed mostly higher as investors shrugged off the latest inflation news and energy shares rallied on strength in crude prices.
The Dow Jones Industrial Average finished up strongly, erasing earlier losses. The Nasdaq closed lower on weakness in tech stocks, while the S&P 500 was up slightly.
The government said inflation at the wholesale level jumped 2% in November, but economists said the data was unusually volatile and didn't signal a big spike in inflation.
Oil prices declined earlier in the session on concerns about warmer weather, but rebounded to finish just below the $63 a barrel mark. Traders were betting that Wednesday's weekly inventory report will show a decline in crude oil inventories.
Dow component Exxon Mobil helped to lead the energy sector higher as buyers came in to take advantage of Monday's selloff in energy shares.
Losses started out across the board and included a drop in technology stocks after Oracle disappointed, as well as a significant decline in electronics retail shares after a disappointing report from Circuit City. Weakness in the financial sector also dragged on the S&P 500.
Shares of Circuit City fell after the consumer electronics retailer reported a fiscal third-quarter loss due to deep discounts on flat-panel televisions and computer products. The company also lowered its full-year forecast and cut its fiscal 2007 outlook.
Oracle reported new software liceses below expectations. The company disappointed some investors Monday when it reported fiscal second-quarter earnings that were only in line with analyst estimates.
Shares of Morgan Stanley bucked the weak trend in financials after the company said it plans to spin off its Discover credit card unit in an attempt to enhance shareholder value. The company also said its fourth-quarter profits fell to $2.21 billion from $2.47 billion a year ago, however, that was still above analysts' expectations.
Airline stocks traded lower after Delta Air Lines rejected a hostile takeover bid from US Airways that would have made the combined company the nation's largest airline. Delta filed a reorganization plan that calls for the airline to emerge from Chapter 11 bankruptcy as a standalone company in the spring of 2007.
The Food and Drug Administration issued a warning for patients taking Biogen Idec and Genentech's drug Rituxan after two patients taking it to combat lupus died from a rare brain infection.
Homebuilders came under pressure including shares of Hovnanian, which fell after the company reported a sharp fourth-quarter loss due to land-related charges.
Asia, Europe Sink after Thai Market Plunges
U.S. trading followed a sell-off in Asia and Europe precipitated by the biggest fall in Thai stock exchange in 16 years.
Thai shares slumped after the government imposed controls on its currency to limit recent sharp appreciation and foreign capital poured out of the country. However, the government later backed off of its stance saying it would lift controls on foreign investment in stocks. Controls would remain on foreign investments in bonds and commercial paper.
London's FTSE-100 index sank at the start of trading.
The Paris CAC-40 closed down, despite expectations for Gaz de France to sign major deals with Russian company Gazprom to secure supplies of Russian natural gas through 2030.
And Frankfurt's DAX was also lower, even though German corporate sentiment unexpectedly improved in November, based on the Munich-based Ifo research institute's business climate index.
Hong Kong and Singapore shares were both sharply lower in reaction to the Thai central bank's capital control measures.
The Nikkei225 Average closed over 1% due to events in Thailand and accounting problems at Nikko Cordial which discouraged investors from picking up brokerage stocks. South Korea's Kospi Index also closed lower.
The Australian market finished weaker on profit-taking amid falls in offshore markets and a lack of fresh news.