- The Washington Times - Saturday, March 14, 2009

Wall Street extended its winning streak into a fourth consecutive day Friday as the government reported another decline in the trade deficit and more encouraging news came from the banking industry, pushing the Dow Jones Industrial Average through the 7,200 level.

At the close, the Dow rose 53.92, or 0.75 percent, to 7,223.98. The tech-heavy Nasdaq Composite Index climbed 5.40, or 0.38 percent, to 1,431.50. The benchmark Standard & Poor’s 500 increased 5.81, or 0.77 percent, to 756.55.

Choppy trading marked the day’s session until an afternoon advance made it clear that a rally that began Tuesday would close out the week, bank stocks leading the way. Bank of America closed the week up 86 percent, Citigroup up 75 percent and Wells Fargo & Co. up 61 percent, CNBC said.

The Dow rose 9 percent for the week, the business TV network said, but it was anyone’s guess whether the four-day rally meant that the bottom has been reached in the bear market that began with Wall Street’s collapse in mid-September. Investors still have lost hundreds of billions of dollars.

The chairman of Citigroup Inc., Richard Parsons, said his troubled bank will not need further government bailout support after three rounds of emergency funding. Citigroup started the Wall Street rally Tuesday with a report of its best quarter since 2007.

The Commerce Department said the trade deficit dropped to $36 billion in January, a 9.7 percent decline from December and its lowest level since October 2002. Analysts had expected the deficit to be $38 billion. The drop largely resulted from less demand for crude oil and other foreign goods, particularly automobiles.

U.S. exports dropped 5.7 percent from December to January to the lowest point since September 2006, and imports declined 6.7 percent, the lowest since March 2005. Both U.S. imports and exports of automobiles and vehicle parts were at their lowest since July 1998, a sign of how the worldwide recession has kept people from buying major items.

“All in all, it was a very weak trade report,” said an analysis from economists at PNC Financial Services Group of Pittsburgh that was made available to The Washington Times.

The economists, Stuart Hoffman and Robert A. Dye, predicted that the output of all goods and services for the first three months of this year will decline by 5 percent at an annualized rate, better than the 6.2 percent drop in the final three months of last year.

In a setback for billionaire Warren Buffett, Fitch Ratings service cut his Berkshire Hathaway’s AAA credit rating to AA-plus because of concerns about its equity and derivatives investments.

“Fitch views the company’s potential earnings and capital volatility derived from its large, unhedged market exposures as inconsistent with the stability required at the AAA level,” Fitch stated.

The move came after Standard & Poor’s, another credit rating agency, downgraded General Electric Co.’s ratings to a similar AA-plus. Berkshire invested $3 billion in GE’s common stock last year at a price of $22.25 a share, Reuters said.

Mr. Buffett, 78, also lost his position as the world’s richest man to Bill Gates, founder of Microsoft Inc., according to Forbes’ annual list. It said Mr. Buffett’s net worth plummeted from $62 billion last year to $37 billion this year.

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