- The Washington Times - Monday, April 6, 2009

UPDATED:

Wall Street declined Monday, ending four straight days of gains amid concerns about U.S. corporate-earning reports due out later this week.

The Dow closed at 7,975.85, down 41.74 points. The Standard & Poor’s 500-stocks Index dropped 7.02 points to closed at 835.48, and the NASDAQ closed at 1,606.71, down 15.16 points.

The release of first-quarter earning reports begins Tuesday with Alcoa, a major U.S. aluminum manufacturer and Dow stock.

Investors also are concerned about reportedly stalled talks in International Business Machines Corp.’s $7 billion bid for Sun Microsystems Inc.

Sun stocks dropped as much as 22 percent, a sign that financial markets might not be recovering enough from the recession to support a major merger. IBM stocks fell 95 cents, to $101.27 a share.

Investors also were concerned after influential analyst Mike Mayo, of Calyon Securities, advised selling bank shares because government efforts to help them might fall short and loan losses will exceed Great Depression levels.

Wells Fargo & Co. and PNC Financial Services Group Inc. were among some of biggest declining bank stocks.

Wells Fargo stock dropped 82 cents, to $15.52, and PNC Financial Services Group Inc., dropped $2.27 to $33.53.

Investors also were concerned about the Treasury Department extending the application deadline to purchase toxic assets. The new April 24 deadline to attract more investors is being interpreted as a sign the program could be in trouble.

In addition, Treasury Secretary Timothy F. Geithner said Sunday the Obama administration could force the resignation of bank presidents as it did recently with Rick Wagoner, chief executive officer of General Motors Corp.

The Dow opened Monday on its best four-week run since 1933 and above the 8,000 mark for the first time since early February.

The rally extended through Friday, despite a Bureau of Labor Statistics report that showed the U.S. economy lost 633,000 jobs in March. The national unemployment rate is now at 8.5 percent, its highest levels since 1983, when the country was still a deep recession and unemployment exceeded 10 percent.

Still, investors are optimistic that the U.S. economy is touching bottom and poised to recover, following several key economic reports last week, including one by the National Association of Realtors that stated pending home sales rebounded in February from a record low.

They also are upbeat following the G-20 talks last week in London in which world leaders agreed to tougher regulations on financial markets and to spend at least $1.1 trillion to stimulate economies and help end the global recession.

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