- The Washington Times - Tuesday, May 12, 2009

UPDATED:

Wall Street opened Tuesday to losses, trying to avoid a repeat of the day before and continue its two-month rally.

The Dow Jones Industrial Average was down 30.90 points, to 8,387.87. The broader Standard & Poor’s 500-stocks Index was at 902.17, down 7.07 points, and the tech-heavy NASDAQ was down 21.37 points, to 1,709.87.

The Commerce Department reported before the markets opened that the U.S. trade deficit increased in March to $27.58 billion, from the revised February figure of $26.13 billion, the first increase since July 2008.

However, analysts said investors appear to be more focused on the possible results of key economic indicators due later this week — including retail sales reports and a government report on inflation.



Macy’s Inc.’s first-quarter report is due Wednesday and Wal-Mart Stores Inc.’s is due Thursday.

Investors focus on the retailers’ monthly, quarterly and annual sales reports because consumer spending accounts for roughly two-thirds of the U.S. economy.

The major markets are up roughly 25 percent in the past two months, following first-quarter reports by major U.S. banks that were better than expected, then upbeat reports last week on unemployment and the health of the country’s largest 19 financial institutions.

The markets’ recent gains appear to show the worst of the recession might be over, but investors remain cautious and the markets still are down significantly from their October 2007 highs.

The Dow closed Monday at 8,418.77, down 155.88 points. The S&P closed at 909.26, down 19.97 points, and NASDAQ closed at 1,731.24, down 7.76 points.

Analysts said investors appeared to cash in Monday on profits or were concerned about three healthy banks — U.S. Bancorp, Capital One Financial Corp. and BB&T Corp. — planning to issue billions in stock shares to help repay the federal bailout loans they have received.

Ford Motor Co. also has announced plans to raise capital by offering common stock.

Overseas, Japan’s Nikkei stock average fell 1.62 percent. Britain’s FTSE 100 increased 0.24 percent, Germany’s DAX index increased 0.92 percent, and France’s CAC-40 increased 0.29 percent.

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