- The Washington Times - Monday, May 18, 2009


Wall Street was up Monday, recovering some of last week’s losses and reviving a two-month rally.

The Dow Jones Industrial Average closed at 8,504.08, a gain of 235.44 points. The broader Standard & Poor’s 500-stocks Index closed at 909.71, up 26.83 points, and the tech-heavy NASDAQ closed at 1,732.36, up 52.22 points.

The gains followed Lowe’s Cos. reporting first-quarter net earnings of $476 million — 21.6 percent less than in the same period last year but meeting analysts’ expectations.

The country’s No. 2 home-improvement chain also said it expects to open at least 60 stores this year and sales could increase by as much as 1 percent.

Lowe’s stock closed at $19.49, up $1.49.

Also Monday, builders said their confidence in May continued to grow regarding the value of new, single-family homes in the housing market, according to the National Association of Home Builders-Wells Fargo Housing Market Index released Monday.

The index increased by two points in May, the second straight month for an increase. “The home builders’ report added fuel to the fire today,” said Brian Lipps, a Charles Schwab & Co. vice president. “There’s a fairly popular opinion that the housing market is now at the core of the [economy’s] problems.”

He said the markets also responded to State Street Corp. saying the bank will issue stocks in the capital markets to help repay most of the $2 billion in bailout money from the federal government. He also pointed to Goldman Sachs raising its rating on Bank of America Corp. to “Buy.”

Bank of America stock closed at $11.73, up $1.06.

U.S. markets are up more than 30 percent since hitting a 12-year low in early March — largely because reports on the health of major banks and first-quarter earnings exceeded analysts’ expectations.

However, a round of economic reports last week showed the economy is not recovering as fast as had hoped and reaffirmed the recession that began in December 2007 will continue until at least the end of the year.

Among the reports were that retail sales fell in April, first-time claims for unemployment insurance increased, and consumer prices were flat in April — suggesting consumers are not spending enough to drive up prices.

The Dow last week fell 3.57 percent. The S&P fell 4.99 percent, and the NASDAQ fell 3.38 percent.

Now that major banks have reported earnings and the federal government’s so-called “stress tests” on them are complete, investors will likely focus on periodic government reports and the housing industry, which includes companies that issue mortgages.

Overseas, Japan’s Nikkei stock average fell 2.44 percent. Britain’s FTSE 100 rose 2.26 percent, Germany’s DAX index rose 2.42 percent, and France’s CAC-40 rose 2.41 percent.

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