- The Washington Times - Tuesday, August 25, 2009

NEW YORK | Investors slowed their hectic buying of stocks Monday, leaving the major indexes little changed after a four-day advance.

Stocks pulled back from their early highs as financial stocks, which had been surging, retreated. Meanwhile, Treasury prices rallied ahead of the latest round of debt auctions.

Analysts had expected a pause after stocks soared last week, lifting the Dow Jones industrial average 370 points. The advance picked up momentum Friday after Federal Reserve Chairman Ben S. Bernanke declared that the economy is on the verge of recovery.

Market analysts have been warning, though, that the market’s upbeat mood could be tested with reports this week on consumer confidence and housing. Some signs of recovery have emerged already in the housing market, but consumers are still struggling. Improved consumer confidence and spending is widely seen as one of the keys that could help end the recession.

Bank shares gave up some of their early gains and traded mixed, weighed down by losses among regional banks. Investors have been worried that smaller banks could face significant hardships in the coming months as losses among commercial real estate loans pile up.

In a research note late Sunday, Rochedale Securities banking analyst Richard Bove predicted that 150 to 200 more U.S. banks could fail in the current banking crisis on top of the 81 banks that have already failed this year, putting greater stress on the Federal Deposit Insurance Corp.’s deposit insurance fund.

The Dow rose 3.32, or less than 0.1 percent, to 9,509.28, after earlier rising as much as 82 points. The Standard & Poor’s 500 Index fell 0.56, or 0.1 percent, to 1,025.57, while the Nasdaq Composite Index fell 2.92, or 0.1 percent, to 2,017.98.

In other trading, the Russell 2000 Index of smaller companies slipped 1.27, or 0.2 percent, to 580.24.

Bond prices rose as investors prepared for $197 billion in auctions this week. The yield on the benchmark 10-year Treasury note fell to 3.48 percent from 3.57 percent late Friday, while the yield on the three-month T-bill fell to 0.15 percent from 0.16 percent.

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