- The Washington Times - Thursday, August 27, 2009

NEW YORK | Stocks finished a choppy day of trading Wednesday mostly higher following positive reports on home sales and factory orders.

The Dow Jones Industrial Average rose for the seventh straight day, marking another new high for the year. All the major stock indicators finished in positive territory, but the gains were minuscule.

An increasingly cautious mood has gripped the market in recent days after a period of fervid buying this spring and summer that sent stocks up more than 45 percent since early March. While economic data are improving, investors are now questioning whether the market can go much higher without clear evidence of economic growth.

With trading volume and news flow tapering off amid Wall Street’s annual summer slowdown, analysts say there are few near-term catalysts that could spur the market higher.

Stocks seesawed without a clear direction Wednesday despite a Commerce Department report that new home sales rose 9.6 percent in July for the fourth straight monthly increase. Sales rose to 433,000, the strongest pace since September and well above the 390,000 figure economists expected.

The latest sign of improvement in housing didn’t do much to impress investors, who have already factored in a recovery in the long-suffering home industry. Some of the latest gains can be attributed to a federal tax credit for first-time homeowners set to expire in November, and the industry has been pressing Congress to extend it.

A separate Commerce Department report showed that orders for goods expected to last at least three years rose 4.9 percent in July - the biggest jump in two years and more than the 3 percent increase economists had expected.

The Dow rose 4.23, or 0.04 percent, to 9,543.52. The Standard & Poor’s 500 Index rose 0.12, or 0.01 percent, to 1,028.12, while the Nasdaq Composite Index rose 0.20, or 0.01 percent, to 2,024.43.

Declining stocks narrowly outnumbered advancers on the New York Stock Exchange, where volume came to a light 1.05 billion shares, down from 1.14 billion shares at the close of trading Tuesday.

In other trading, the Russell 2000 Index of smaller companies rose 0.80, or 0.1 percent, to 584.02.

Shares of homebuilders surged for a second day after the housing data showed the supply of new homes on the market shrank to the lowest level since April 2007. If supply is decreasing, builders may need to ramp up production.

Hovnanian Enterprises Inc. rose 43 cents, or 9.4 percent, to $5, tacking on to its 6.5 percent jump the previous day. The stock is now at its highest level since October. Lennar Corp. rose 61 cents, or 4.1 percent, to $15.58 - its highest point since September.

Retail stocks were mostly higher after a handful of upbeat earnings reports. Shares of Dollar Tree Inc. rose $2.23, or 4.7 percent, to $50.13 after the company posted a 51 percent jump in its second-quarter profit as its deeply discounted goods attracted cash-strapped consumers.

Government bond prices were little changed despite favorable demand at an auction of $39 billion in five-year notes. The yield on the benchmark 10-year Treasury note was unchanged from late Tuesday at 3.44 percent.

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