- The Washington Times - Tuesday, August 18, 2009

Wall Street on Tuesday recovered some of its previous-day losses, following reports on housing construction and retail earnings.

The Dow Jones Industrial Average closed at 9,217.94, up 82.60 points. The broader Standard & Poor’s 500-stock Index closed at 989.67, up 9.94 points, and the Nasdaq closed at 1,955.92, up 25.08 points.

The construction of new single-family homes in the United States increased by 1.7 percent in July. However, overall home construction unexpectedly declined 1 percent, after three months of increases, because of a sharp drop in apartment-building construction.

The numbers also failed to meet analysts’ expectations of a roughly 3 percent increase. Building permits declined 1.8 percent.

Home Depot Inc., the country’s second-largest retailer, reported that second-quarter earnings were down roughly 7 percent compared with the previous quarter but met analysts’ expectations.

“Concerns about the housing market, rising unemployment and softness in the overall economy continue to pressure consumers,” said Frank Blake, Home Depot’s chairman and chief executive officer. “Our business performed well in a down market.”

A second government report Tuesday showed that the prices U.S. manufacturers pay for materials declined by 0.9 percent in July. The drop in the Producer Price Index for Finished Goods followed increases in June and May and added to concerns that unemployment and penny-wise consumers are driving down prices and slowing economic growth and recovery.

The price index for energy goods fell 2.4 percent in July, and prices for consumer foods decreased 1.5 percent. The index for goods other than foods and energy dipped 0.1 percent, according to the Labor Department. The report followed the release Friday of the Consumer Price Index for July, which showed prices were unchanged from June.

The markets dropped roughly 2 percent in the sell-off Monday amid concerns about unemployment and consumer spending. The losses Monday were the biggest in six weeks, with the Dow losing 186 points. Still, analysts said they expected the pullback, considering the markets’ strong rally since hitting 12-year lows in early March.

This year, the Dow is up roughly 5 percent. The S&P is up about 10 percent, and the Nasdaq is up about 25 percent.

The recovery Tuesday was expected and followed a worldwide rebound.

Overseas, Japan’s Nikkei stock average increased 0.16 percent. Britain’s FTSE 100 closed up 0.88 percent, while Germany’s DAX index increased 0.94 percent. France’s CAC-40 was up 0.91 percent.

Bond prices were slightly lower after a big increase Monday, which resulted from investors leaving stocks. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, increased to 3.51 percent from 3.47 percent late Monday.

Gold prices increased, and the dollar gained against other major currencies.

Oil prices also increased. The price of light crude was up $2.44 to $69.19 a barrel on the New York Mercantile Exchange.

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