- The Washington Times - Friday, March 20, 2009

NEW YORK (AP) - Traders lay low Friday, making few big moves as the stock market looked to close with its first two-week gain in close to a year.

Stocks fluctuated in a narrow range The quiet moves weren’t unexpected given the double-digit gains stocks have logged since only last week. In less vexing times, investors might see advances of that size over the course of a year.

Investors showed little reaction to Federal Reserve Chairman Ben Bernanke’s call Friday for banking supervisors to pay “close attention” to compensation practices as they examine the soundness of financial institutions.

Part of Friday’s relative calm could be tied to a mix of exhaustion and caution among traders. The Fed jolted the market this week by announcing plans to buy Treasury securities to revive lending and the economy. Stocks initially jumped on the move but fell Thursday on worries about inflation.

Other markets showed big moves during the week: In just two days, the dollar fell 5 percent versus the euro and 3 percent versus the yen. Oil prices, meanwhile, soared 7 percent Thursday above $51 a barrel to the highest level this year.

Many analysts believe stocks were due for a pullback after the Dow Jones industrial average rose more than 14 percent over seven trading days. But considering how much the market has rallied, it appears to be holding up well. The Dow is on pace for its first two-week run of gains since the period ended May 2, 2008.

Since a batch of troubled banks told investors they were profitable in January and February nearly two weeks ago, the stock market bounced off its 12-year lows. Even after Thursday’s retreat, the Dow was still up 13 percent from its lows, and the S&P; 500 index was up nearly 16 percent.

The question on Wall Street is whether there will be enough good news in the coming days to keep stocks rising.

Michael Binger, portfolio manager at Thrivent Investment Management in Minneapolis, said the government efforts around the world to fan economic growth and boost lending will eventually take hold and that the market is signaling that the economy is hitting bottom. He contends that it shouldn’t be too difficult for stocks to keep moving higher because expectations have fallen so low.

“I think the stock market is saying that fourth quarter of 2008 and first quarter of 2009 may be the trough in negative news,” he said.

In early afternoon trading, the Dow industrials fell 26.77, or 0.4 percent, to 7,374.03.

Broader stock indicators traded in a narrow range. The Standard & Poor’s 500 index fell 7.13, or 0.9 percent, to 776.91, and the Nasdaq composite index fell 14.37, or 1 percent, to 1,469.11.

The Russell 2000 index of smaller companies fell 6.25, or 1.5 percent, to 407.01.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to a heavy 1.15 billion shares.

Government bond prices slipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.63 percent from 2.60 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.20 percent from 0.18 percent.

The dollar recovered modestly against other major currencies. Gold prices slipped.

Oil prices rose 36 cents to $51.97 a barrel on the New York Mercantile Exchange.

In corporate news, printer and copier maker Xerox Corp. slashed its first-quarter profit forecast by nearly 80 percent on restructuring costs and a slowdown in technology spending. Xerox fell 77 cents, or 14.4 percent, to $4.57.

Citigroup Inc. said it was shifting Edward Kelly, the former head of global banking for Citi Private Bank, to the role of chief financial officer, and naming Gary Crittenden, who has been CFO, as chairman of Citi Holdings. Citi Holdings is the portion of Citigroup that holds the bank’s riskiest assets. Citi rose 9 cents, or 3.5 percent, to $2.69.

Overseas, Japan’s stock market was closed for a holiday. In afternoon trading, Britain’s FTSE 100 rose 0.7 percent, Germany’s DAX index fell 0.6 percent, and France’s CAC-40 rose 0.5 percent.



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