- The Washington Times - Wednesday, July 15, 2009

Investors got the solid results from Goldman Sachs they wanted Tuesday, but the gains were modest after a big rally the day before.

Mixed economic data reminded investors of the challenges businesses still face and left the market zigzagging all day. Some stocks gained on a handful of strong earnings, while Treasurys tumbled on news of a jump in inflation.

Investors were pleased that Goldman Sachs Group Inc.’s second-quarter earnings easily surpassed analysts’ forecasts thanks to big gains in trading and underwriting. But the release of the results came as something of an anticlimax, as anticipation of a strong report sent the stock market soaring Monday.

Johnson & Johnson also had better-than-expected results, although its profits fell 3.5 percent.

The Dow Jones Industrial Average rose 27.81, or 0.3 percent, to 8,359.49. The Standard & Poor’s 500 Index rose 4.79, or 0.5 percent, to 905.84, while the Nasdaq Composite Index rose 6.52, or 0.4 percent, to 1,799.73.

More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to a light 978.8 million shares, down from 1.2 billion Monday.

The yield on the 10-year Treasury note jumped to 3.47 percent from 3.35 percent as its price fell nearly a point. Long-term government debt tends to be sensitive to reports of higher prices, as inflation erodes the value of fixed-income securities over time.

Goldman Sachs rose 22 cents to $149.66. Later this week, investors will get reports from JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.

One troubling indication that the financial industry has not fully recovered: Commercial lender CIT Group Inc. is talking with the government about receiving emergency assistance to help solve liquidity problems. CIT rose 26 cents, or 19.3 percent, to $1.61 after tumbling 11.8 percent Monday.

There were mixed forecasts from several companies. Dell Inc. warned late Monday that quarterly gross margins will fall below first-quarter levels because of higher component costs and pressure to keep prices low. Shares sank more than 8 percent, falling $1.05, or 7.8 percent, to $11.97.

Railroad operator CSX Corp. said it expects shipping demand to sink by double-digits again this quarter, but not as drastically as the 21 percent decline in the second quarter. Shares jumped $2.26, or 7 percent, to $34.80.

Johnson & Johnson gained 51 cents to $58.23.

The dollar fell against other major currencies, while gold prices rose.

Oil prices reversed early gains and slipped 17 cents to $59.52 a barrel on the New York Mercantile Exchange.

In other trading, the Russell 2000 index of smaller companies rose 3.21, or 0.7 percent, to 496.52.

Overseas, Japan’s Nikkei stock average gained 2.3 percent. Britain’s FTSE 100 rose 0.9 percent, Germany’s DAX index rose 1.3 percent and France’s CAC-40 gained 1.0 percent.

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