The markets rose to close higher with the Dow climbing 60 points to 12,362 even as crude oil prices set another record and wholesale inflation surged. Nasdaq gained 10 points to 2286.

On the upside

Fifth Third Bancorp's $1.1 billion cash and stock offer to acquire First Charter (Nasdaq: FCTR) was approved by the Federal Reserve.

Rumors that a major investor is poised to take a significant stake in Semiconductor Manufacturing International(NYSE: SMI) lifted shares of the chip maker.

BB&T Capital Markets upgraded Smithfield Foods (NYSE: SFD) .

On the downside

Robert W. Baird & Co. analyst Tristan Gerra said that Sigma Designs (Nasdaq: SIGM) will lose market share and failed to secure a contract to supply chips to Motorola for Internet television set-top boxes.

Avnet (NYSE: AVT) blamed soft demand and lower rebates for warning that third quarter results will fall short of estimates.

Although State Street (NYSE: STT) reported higher first quarter income that surpassed expectations, Fitch Ratings warned that State Street's ratings may be cut due to substantial unrealized losses in the company's fixed income portfolio.

In the broad market, advancing issues outpaced decliners by a margin of nearly 3 to 2 on the NYSE and by nearly 5 to 4 on Nasdaq. The Russell 2000 which tracks small cap stocks gained 6 points to 692.