- The Washington Times - Tuesday, June 2, 2009

Wall Street posted small gains Tuesday following a report that pending home sales increased in April for the third straight month as a result of low mortgage rates and an $8,000 federal tax benefit.

The Dow Jones Industrial Average closed at 8,740.87, up 19.43 points. The broader Standard & Poor’s 500-stock Index closed at 944.74, up 1.87 points, and the tech-heavy NASDAQ closed at 1,836.80, up 8.12 points.

Early gains had the Dow in the positive this year. However, financial stocks dropped after Morgan Stanley, JPMorgan Chase & Co. and American Express Co. said they would offer common stock to raise capital and repay federal bailout money.

JPMorgan closed at $34.78, down $1.88 a share, and American Express closed at $24.74, down $1.25.

Morgan Stanley stock closed at $30.17, up 28 cents.

The overall gains followed a surge Monday on better-than-anticipated reports on manufacturing, consumer spending and construction. The Dow gained more than 221 points and all the major indexes increased by more than 2 percent. The S&P and NASDAQ increased to their highest levels this year.

The markets are up roughly 30 percent since hitting a 12-year low in early March with analysts saying major U.S. banks and most other sectors of the economy appear to be stabilizing.

However, the rally has wavered in recent weeks as investors look for clearer signs about when the 19-month-long recession will end.

Among the new concerns are the global economy, rising interest rates, the sinking dollar and the increasing price of oil and other commodities.

The yield on the 10-year Treasury note, a benchmark for home mortgages and other consumer loans, closed at 3.64 percent. And light, sweet crude closed at $68.55 a barrel on the New York Mercantile Exchange.

Investors later Tuesday will be looking at Homebuilder Hovnanian Enterprises’ second-quarter results, scheduled for release after the the markets close.

General Motors Corp. on Tuesday, a day after filing for bankruptcy protection, said it has entered an agreement to sell its Hummer brand, which could save thousands of autoworker jobs. Chrysler LLC filed for bankruptcy April 30.

GM also said domestic sales increased by 11 percent compared to April but were down 30 percent compared to a year ago.

Ford Motor Co., the only Big Three automaker that has not filed for bankruptcy, said its domestic sales in May increased by 20 percent compared to April but decreased by 24 percent compared to May 2008.

Ford stock closed at $6.41, up 28 cents a share.

Overseas, Japan’s Nikkei stock average rose 0.27 percent, while European indexes were mostly lower. Britain’s FTSE 100 was down 0.65 percent, Germany’s DAX index was up 0.03 percent, and France’s CAC-40 was down 0.04 percent.

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