- The Washington Times - Tuesday, January 27, 2009

NEW YORK | Wall Street has managed an advance the hard way - zigzagging on a mix of earnings and economic news before closing moderately higher.

The major indexes changed course several times during Monday’s session, rising in response to Pfizer Inc.’s $68 billion planned acquisition of Wyeth, a deal that reassured investors that mergers could still take place in a recession. And the National Association of Realtors said existing homes sales rose rather than fell in December, stirring hopes that lower prices and falling interest rates are starting to erase at a glut of homes with “for sale” signs.

But news from big companies weighed on the market. Downbeat comments from Caterpillar Inc. curbed the advance in the Dow industrials. Caterpillar shares dropped more than 8 percent after the maker of heavy equipment said plunging commodity prices left the company “whipsawed” in the fourth quarter. Caterpillar said it would offer buyouts to 25,000 employees in the U.S. and cut executive pay.

Home Depot Inc. also announced big job cuts. The company said it would slash 7,000 jobs and close its smaller Expo chain as it struggles with the weak housing market.

After the close of trading, chip maker Texas Instruments Inc. also announced job cuts - a total of 3,400, with 1,800 coming from layoffs. It also said its fourth-quarter earnings fell sharply.

Concerns about the banking industry added to the market’s uncertainty, and most financial stocks fell. After the closing bell, American Express Co. announced fourth-quarter earnings that missed analysts’ estimates by a penny. The company, as expected, reported that its cardholders cut back their spending during the October-December period.

The Dow Jones Industrial Average rose 38.47,or 0.48 percent, to 8,116.03, after briefly moving into negative territory.

The Standard & Poor’s 500 index rose 4.62, or 0.56 percent, to 836.57, and the Nasdaq Composite Index rose 12.17, or 0.82 percent, to 1,489.46.

The Russell 2000 Index of smaller companies rose 5.70, or 1.28 percent, to 450.06.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.27 billion shares.

Another unnerving unknown for the market is the exact form that President Obama’s proposed stimulus package will take after it has worked its way through Congress.

Senate committees are scheduled to take up the massive plan Tuesday and the full House is expected to vote on its version of the $825 billion package Wednesday. The plan could include big tax cuts and a massive public works program.

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