A surge in producer prices weighed down the markets to a lower close with the Dow plunging 109 points to 12,160. Nasdaq dropped 17 points to 2458.

On the upside

Lehman Brothers upgraded Denbury Resources (NYSE: DNR).

Chesapeake Energy (Nasdaq: CHK) will pay approximately $178 million to Goodrich Petroleum (Nasdaq: GDP) as part of a joint venture to develop two fields in Louisiana.

An administrative law judge recommended that New York's Public Service Commission reject Iberdrola's proposed $4.6 billion purchase of Energy East (NYSE: EAS).

On the downside

Medicis Pharmaceutical (NYSE: MRX) will pay $150 million in cash to acquire privately held LipoSonix.

Goldman Sachs cut its price target for Washinton Mutual (NYSE: WM) saying that the nation's banks will probably have to raise $65 billion due to the continuing credit crisis.

Alliance One International (NYSE: AOI) delayed filing its annual report saying that its financial statements are not complete.

In the broad market, declining issues outpaced advancers by a margin of 7 to 5 on the NYSE and by a margin of more than 5 to 3 on Nasdaq. The Russell 2000 which tracks small cap stocks dropped 4 points to 737.