- The Washington Times - Tuesday, June 2, 2009

Wall Street posted midday gains Tuesday following a report that pending home sales increased in April for the third straight month as a result of low mortgage rates and an $8,000 federal tax benefit.

The number of signed contracts last month increased by 6.7 percent from March and 3.2 percent from April 2008, according to the National Association of Realtors’ pending home sales index.

The Dow Jones Industrial Average was at 8,727.71, up 6.27 points. The broader Standard & Poor’s 500-stocks Index was at 943.13, up 0.26 points, and the tech-heavy NASDAQ was at 1,833.10, up 4.42 points.

However, financial stocks dropped after Morgan Stanley, JPMorgan Chase & Co. and American Express Co. said they would offer common stock to raise capital and repay federal bailout money.

Morgan Stanley stock was down 94 cents, to $28.95 a share in midday trading. JPMorgan dropped $1.32, to $34.79, and American Express dropped $1.70, to $24.29.

Overall gains followed a surge Monday on better-than-anticipated reports on manufacturing, consumer spending and construction.

The Dow gained more than 221 points and all the major indexes increased by more than 2 percent. The S&P and NASDAQ increased to their highest levels this year.

The markets are up roughly 30 percent since hitting a 12-year low in early March with analysts saying major U.S. banks and most other sectors of the economy appear to be stabilizing.

However, the rally has wavered in recent weeks as investors look for clearer signs about when the 19-month-long recession will end.

Among the new concerns are the global economy, rising interest rates, the sinking dollar and the increasing price of oil and other commodities.

Government bonds rose early Tuesday. The yield on the 10-year Treasury note, a benchmark for home mortgages and other consumer loans, slipped to 3.64 percent from 3.68 percent Monday.

The dollar was mixed against other major currencies. And light, sweet crude dropped 57 cents, to $68.01 a barrel, on the New York Mercantile Exchange.

Investors later Tuesday will be looking at U.S. automakers’ report on May sales and Homebuilder Hovnanian Enterprises’ second-quarter results, scheduled for release after the the markets close.

General Motors Corp. on Tuesday, a day after filing for bankruptcy protection, said it has entered an agreement to sell its Hummer brand, which could save thousands of autoworker jobs.

Overseas, Japan’s Nikkei stock average rose 0.27 percent, while European indexes were mostly lower. Britain’s FTSE 100 was down 0.50 percent, Germany’s DAX index was up 0.18 percent, and France’s CAC-40 was down 0.06 percent.

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