- The Washington Times - Wednesday, August 5, 2009

NEW YORK | Having sprinted higher for three weeks, the stock market is taking a break.

Investors made few big moves Tuesday after stocks rocketed 14 percent in just 16 days. The market put up modest gains as many traders held their positions and looked toward the Labor Department’s employment report Friday.

The Dow Jones Industrial Average rose 34 points. On Monday, the blue chips jumped 115 points and the Standard & Poor’s 500 Index nosed above 1,000 for the first time in nine months.

Tuesday’s mostly upbeat economic data helped prevent the market’s pause from turning into the type of slide that can follow big jumps. Analysts have been predicting stocks would idle after such a strong run, and some saw investor caution at work.

Corporate news also helped buoy sentiment. Caterpillar Inc. predicted that cost cuts and other efforts will enable it to post profits over the long term no matter how slowly the economy recovers. The world’s largest maker of construction and mining equipment is considered a bellwether of the global economy. Its stock was the biggest gainer among the 30 stocks that make up the Dow.

PepsiCo Inc. said Tuesday that it was buying its two top bottlers for $7.8 billion in a bid to save money and get new products to market more quickly. The deals were sealed months after PepsiCo’s first offers were rejected and 10 years after PepsiCo first spun off its largest bottler, Pepsi Bottling Group.

Also Tuesday, GMAC Inc. said it posted a wider second-quarter loss of $3.9 billion as it shifted from being primarily an auto and mortgage loan company to an online, retail bank. The bulk of the latest quarterly loss stems from a $1.6 billion charge related to company’s mortgage business.

The Dow rose 33.63, or 0.4 percent, to 9,320.19. The S&P; 500 rose 3.02, or 0.3 percent, to 1,005.65, while the Nasdaq Composite Index rose 2.70, or 0.1 percent, to 2,011.31. The gains left stocks at new highs for the year.

Stocks jumped more than 1 percent Monday on upbeat reports on manufacturing, housing and banking.

The advance adds to the Dow’s rally in July of 725 points, or 8.6 percent. It was the best month for the Dow in nearly seven years and injected a stalled spring rally with new energy. The Dow is still down 34 percent from its peak in October 2007.

Bond prices fell, pushing the yield on the benchmark 10-year Treasury note, a widely used benchmark for mortgages and other kinds of loans, up to 3.69 percent from 3.64 percent late Monday.

In other trading, the Russell 2000 Index of smaller companies rose 4.96, or 0.9 percent, to 570.74.

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