- The Washington Times - Wednesday, April 8, 2009

Wall Street posted losses Tuesday for a second straight day, cooling a record four-week rally ahead of potentially bad reports on corporate earnings.

The major markets were down more than 2 percent in light trading.

The Dow Jones Industrial Average dropped 186.29 points, to close at 7,789.56. The Standard and Poor's 500 Index closed at 815.54, down 19.94 points, and the Nasdaq Composite Index was down 45.10 points, to 1,561.61.

Analysts attributed the selling to investors taking profits from the March gains. 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. Major stock indexes are still up roughly 20 percent from 12-year lows in early March.

The losses Tuesday were across the markets, ranging from financial to technology stocks.

The markets, which will be closed on Good Friday, opened Tuesday following losses in overseas markets and stock futures.

U.S. markets have made gains in recent weeks amid upbeat economic reports, including a National Association of Realtors report last week that said pending home sales rebounded in February from a record low, signaling that the worst of the global recession might be over.

However, the Dow closed Monday at 7,975.85, down 41.74, ending a four-day run amid concerns about earnings reports and the disappointment over the stalling of IBM Corp.'s $7 billion bid to buy Sun Microsystems Inc. The S&P closed at 835.48, and the Nasdaq Composite Index dropped to 1,606.71.

Investors also were concerned about the Treasury Department this week 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.

Meanwhile, the government reported Tuesday that consumer borrowing plunged more than expected in February as Americans cut back their use of credit cards by a record amount.

The Federal Reserve said that consumer borrowing dropped at an annual rate of $7.48 billion in February, or 3.5 percent, from January. Wall Street economists expected borrowing to slide by only $1 billion, according to a survey by Thomson Reuters.

The decline was led by the record drop in borrowing on credit cards, which fell at an annual rate of $7.8 billion, or 9.7 percent. That is the sharpest drop in dollar terms since federal records began in 1968, and the steepest percentage fall since 1978.

The Associated Press reported that after the markets closed Tuesday, Alcoa Inc., the largest U.S. aluminum producer, said it lost $497 million during the first quarter, as the global economic crisis continued to erode prices and demand for the lightweight metal. Alcoa lost 61 cents per share in the quarter ended March 31. During the same period a year earlier, the company earned $303 million, or 37 cents per share.

Excluding one-time items totaling $17 million, or 2 cents per share, Alcoa's loss would have been 59 cents per share.

Analysts had expected Alcoa to lose 56 cents per share during the quarter. Shares of Alcoa fell 7 cents to $7.72 in after-hours trading.

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