AS WEEK END, SHARE MANAGE TO STAY ON UPSIDE
- From: GLOBALIST <free.tuneup@xxxxxxxxx>
- Date: Sun, 15 Mar 2009 09:32:34 -0700 (PDT)
Stocks & Bonds
As Week Ends, Shares Manage to Stay on Upside
JACK HEALY
Published: March 13, 2009
Wall Street closed higher for the fourth consecutive day on Friday,
capping its best week since November, and one that gave investors a
break from a relentless streak of declines.
Jim R. Bounds/Bloomberg News
General Electric, which makes jet engines, was stripped of its triple-
A credit rating, but just by one notch, less than predicted.
The Dow Jones industrial average closed 53.92 points, or 0.75 percent,
higher to finish the week at 7,223.98, and the Standard & Poor’s 500-
stock index rose 0.77 percent, or 5.81 points, to 756.55. The
technology-heavy Nasdaq index was 5.4 points, or 0.38 percent, higher
at 1,431.50.
For the week, the Dow finished up more than 9 percent while the S.& P.
500 ended 10.7 percent higher, largely on the back of rallies on
Tuesday and Thursday. A closely watched gauge of market volatility
dropped for the week.
The gains on Friday came as investors responded to Chinese concerns
about its holdings of government debt and a rosy assessment of the
economy from Lawrence H. Summers, a top economic adviser to President
Obama.
In a talk before the Brookings Institution, Mr. Summers pointed to
some signs showing an easing in the pace of economic contraction, but
he said that the economy’s problems would not be solved overnight.
Before the markets opened, China’s prime minister, Wen Jiabao, said he
was “a little worried” about the country’s $1 trillion investment in
United States Treasury debt. China is the largest purchaser of
American government debt, which is generally considered the world’s
safest investment.
Long-term Treasury prices fell slightly on Friday as investors mulled
over the comments from Mr. Wen and wondered whether they presaged a
reduced appetite for American debt as the federal government ramps up
huge new spending projects.
The Treasury’s benchmark 10-year note fell 10/32, to 98 25/32, and the
yield, which moves in the opposite direction from the price, was at
2.89 percent, up from 2.85 percent late Thursday.
Crude oil settled 81 cents lower at $46.25 a barrel, and large energy
companies ended the day mixed. The gains in the Dow and S.& P. 500
this week brought the market indexes back from their worst levels in
about 12 years.
After enduring months of increasingly bleak headlines about bank
solvency and corporate losses, investors seized on a few strands of
less-than-awful economic news and alchemized them into hope, breathing
life back into depressed financial shares and other niches of the
market.
This week, Bank of America, JPMorgan Chase and Citigroup assured
investors that they had turned a corner in the first months of 2009
and were operating at a profit. All three big banks have received
government aid under the $700 billion financial bailout, and the
government has taken a 36 percent stake in Citigroup.
Shares of the big banks were mixed Friday. Citigroup closed 11 cents
higher at $1.78 while Bank of America and Wells Fargo fell by a penny,
to $13.94.
Investors also put a positive spin on new retail sales numbers, which
fell less than economists had expected, and said they breathed a sigh
of relief after a long-anticipated downgrade of General Electric’s
triple-A credit cut the conglomerate’s rating by only one notch.
Investors continued to speculate that regulators were considering
changes in mark-to-market accounting rules, which regulate how
companies value assets. And they cheered statements that the
Securities and Exchange Commission could reinstate a regulation
intended to slow the short-selling of stock.
Although investors were pleased with the bounce in the stock indexes,
which had fallen some 25 percent since the start of the year, experts
cautioned that three days did not make a bull market.
“You will see rallies like this from time to time as we bounce along
the bottom of the market,” said Joseph V. Battipaglia of Stifel
Nicolaus, discussing Thursday’s gains. “Recent history has had a lot
of hopes dashed on big rallies. The question is, what about this time
around?”
The government offered another reminder on Friday that the American
economy was still in a global downturn, reporting that the trade
deficit shrank for another month in January as overall trade volumes
dwindled.
The Commerce Department said that American imports and exports of all
goods and services totaled $285.8 billion in January, down 20 percent
from the January 2008.
.
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