- The Washington Times - Wednesday, March 11, 2009

UPDATED:

Wall Street edged higher in a choppy session Wednesday, with finance-industry and high-tech stocks leading the way but the major indexes retreating from the day’s highs.

At the close, the Dow Jones Industrial Average rose 3.91, or 0.06 percent, to 6,930.40. The tech-heavy Nasdaq Composite increased 13.36, or 0.98 percent, to 1,371.64. The benchmark Standard & Poor’s 500 inched up 1.76, or 0.24 percent, to 721.36.

Bank and financial stocks again led the way upward as hopes for a follow-on rally to the 379-point gain of the Dow on Tuesday evaporated as the markets seesawed through the session.

The financial industry, hard hit during the recession, did well for the second consecutive day. Citigroup rose 7 percent, Bank of America tacked on 3.5 percent, JPMorgan Chase added 4.5 percent, Morgan Stanley increased 9 percent and Goldman Sachs jumped 8.3 percent.



Although the markets rose for the second successive day, the biggest question was how long Tuesday’s rally could be sustained, especially as the markets kept dipping and ended barely in positive territory. It is not uncommon for profit-taking to erode a one-day gain in the markets.

The price of a barrel of light, sweet crude oil dropped $2.75 to close at $42.96 on the New York Mercantile Exchange because of, CNBC said, a surge of 700,000 barrels in inventories. It said OPEC was not expected to cut production at its meeting this weekend.

Gold rose about $11 to again close above $900 an ounce.

Jamie Dimon, the CEO of JPMorgan Chase, told a U.S. Chamber of Commerce conference that he sees an economic recovery in sight.

“There are modest signs of a recovery and healing out there,” he said.

But as if to remind investors about the recession, National Semiconductor Corp. said it will dismiss 1,725 workers worldwide, about one-quarter of its labor force because of a decline in chip sales. The Santa Clara, Calif., company said layoffs will cost up to $180 million in severance and other charges.

Treasury Secretary Timothy F. Geithner cautioned during an interview on “The Charlie Rose Show” on Tuesday night that trouble still lies ahead for the nation’s major banks in the form of toxic assets — those whose value cannot be ascertained and still are on the books.

Mr. Geithner said that the Obama administration has a plan to finance private investors who would be willing to buy these assets but that it would take time to work.

In a significant move that helped push the rally to a Dow gain of 379 points, the chair of the key House Financial Services Committee, Rep. Barney Frank, Massachusetts Democrat, said he expects the Securities and Exchange Committee to reinstate a rule — called the uptick rule — that only permits a stock to be sold short when the last sale price was higher than the previous one.

The SEC suspended the rule in 2007.

A short sale is when an investor sells a stock in hopes that it will drop in value so that it can be bought back at a lower price, earning a profit. Short selling, especially of financial-industry stocks, has helped drive down the prices of those shares.

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