- The Washington Times - Tuesday, April 21, 2009

Wall Street posted gains Tuesday, recovering from earlier losses after Treasury Secretary Timothy F. Geithner said the majority of U.S. banks have enough capital to cushion against losses and bad debts in the recession.

The Dow Jones Industrial Average closed at 7,969.56, up 127.83 points. The broader Standard & Poor’s 500-stocks Index closed at 850.08, up 17.69 points, and the tech-heavy NASDAQ closed at 1,643.85, up 35.64 points.

Bank stocks helped the afternoon rally. JPMorgan Chase & Co. rose 3.1 percent, to $24.24 a share, and Citigroup Inc. rose 8.85 percent, to $3.20.

Wall Street opened to mixed results following a sell-off Monday and an underwhelming earnings report in the morning by Bank of New York Mellon Corp.

Mellon reported first-quarter income of $322 million, roughly 51 percent less than in the first quarter of 2008. The company also said it was cutting dividends to bolster its capital reserves.

Mellon stock was down 0.18 percent, to $27.98 a share, at the close of trading.

In addition Tuesday, the heavy-equipment manufacturer Caterpillar Inc. reported a first-quarter loss of $112 million. The Peoria, Ill.-based company said it would be profitable this year but acknowledged being unclear about its future.

“The high degree of uncertainty in the global economy, the timing and impact of stimulus measures, and the extent of dealer-inventory reductions make it very difficult to forecast sales and revenues,” the report stated.

The Dow lost 289 points Monday after a six-week rally in U.S. markets. Analysts have been optimistic about an economic recovery, following better-than-expected reports on first-quarter income by Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs Group Inc. and Wells Fargo. A new round of reports will be released this week, including one Wednesday from Morgan Stanley.

Stock prices have increased more than 20 percent since the markets hit a 12-year low in early March, but analysts remain concerned about banks’ bad debt, despite the upbeat first-quarter reports.

Overseas on Tuesday, Japan’s Nikkei stock average fell 0.34 percent, Britain’s FTSE 100 fell 3.40 percent, Germany’s DAX index was down 0.34 percent, and France’s CAC-40 fell 0.15 percent.



Click to Read More

Click to Hide