- The Washington Times - Thursday, July 9, 2009

NEW YORK | Stocks finished mostly lower after zigzagging Wednesday as a mixed outlook on the economy from the International Monetary Fund and falling commodity prices added to a downbeat mood.

Another tumble in oil prices dragged energy shares lower and reflected concerns that demand for resources will remain weak as the economy struggles.

Stocks drew some support from a strong auction of 10-year Treasury notes. That helped allay one of the market’s recent worries - that the government would have trouble finding enough buyers for the massive amount of debt it’s issuing. Investors also flocked to the safety of government debt because they are worried about the economy.

The Dow Jones Industrial Average rose 14.81, or 0.2 percent, to 8,178.41.

The broader Standard & Poor’s 500 Index fell 1.47, or 0.2 percent, to 879.56 and the Nasdaq Composite Index rose 1.00, or 0.1 percent, to 1,747.17. The Dow and S&P; 500 hit levels not seen since May 1.

Many analysts say a recovery is indeed on its way - investors just need to be more realistic about its pace.

“At least for the first year of the expansion, we’re likely to see quite anemic growth,” said Avery Shenfeld, chief economist at CIBC World Markets. “The message is to be patient. The broader rise in equities that we’ve seen since the spring will eventually prove to be warranted.”

The IMF said Wednesday that it expected the world economy to shrink by 1.4 percent in 2009, slightly worse than its earlier estimate of 1.3 percent. But it boosted its estimate for global economic growth in 2010 to 2.5 percent, up from its April projection of 1.9 percent.

Meanwhile, oil prices fell for a sixth straight day, dropping $2.79 to settle at $60.14 a barrel, tumbling sharply from an eight-month high of $73 in just one week.

The falling price of oil has contributed to selling on world exchanges over the past week. On Tuesday, the major U.S. indexes lost at least 2 percent, including the Dow, which fell 161 points.

The Dow and the S&P; 500 have shed 7 percent since their recent highs June 12. Though the weak volume that has marked trading in recent weeks shows little conviction behind the selling, analysts say the market is at risk for a further pullback if it doesn’t soon get the good news it’s seeking.

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