- The Washington Times - Tuesday, July 28, 2009

NEW YORK | Stocks edged higher after zigzagging in subdued trading Monday on mixed reports about the economy and corporate earnings.

The Dow Jones Industrial Average rose 15 points. But modest moves in the market’s major indicators belie larger forces at work: Investors aren’t dumping stocks, even in the face of downbeat news.

Poor earnings news from Verizon Communications Inc., Aetna Inc. and Corning Inc. kept the market’s gains in check, adding another pause to a powerful rally that has sent major indicators rocketing 11 percent in just two weeks.

Stocks are steady in part because many investors are not retreating for fear of missing another rally. Even earlier this month, when a spring rally was still stalled, investors likely would have looked to the news out Monday as reason to sell.

RadioShack Corp. reported higher second-quarter earnings that beat forecasts - but mainly because of cost-cutting - a theme that has become familiar this earnings season and has left many investors disappointed.

On the plus side, a government report showed new home sales posted the fastest increase in June in more than eight years as buyers jumped on reduced prices, low interest rates and a federal tax credit for first-time homeowners. That sent stocks of home builders surging.

The Dow rose 15.27, or 0.2 percent, to 9,108.51. The broader Standard & Poor’s 500 Index rose 2.92, or 0.3 percent, to 982.18, while the Nasdaq Composite Index rose 1.93, or 0.1 percent, to 1,967.89.

Bond prices fell, pushing yields higher, ahead of a busy week of Treasury auctions. The yield on the benchmark 10-year Treasury note rose to 3.73 percent from 3.66 percent late Friday.

Among companies posting results, Verizon shares fell 50 cents to $31 after the nation’s largest wireless carrier reported a 21 percent drop in second-quarter profit and announced another 8,000 job cuts.

RadioShack fell $1.06, or 6.6 percent, to $15 after cost-cutting drove profit growth and sales fell short of analysts’ expectations.

Aetna’s profit skidded 28 percent on higher medical expenses in its commercial business, and the health insurer cut its profit forecast for the second time in two months. The stock fell 72 cents, or 2.7 percent, to $25.72.

Corning said its second-quarter earnings tumbled from results inflated by a big one-time gain a year ago. The stock fell 50 cents, or 2.9 percent, to $16.50.

Among home builders, Beazer Homes USA Inc. jumped 36 cents, or 13.9 percent, to $2.95, while Hovnanian Enterprises Inc. rose 26 cents, or 9.1 percent, to $3.11.

The Russell 2000 Index of smaller companies rose 2.42, or 0.4 percent, to 550.88.

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