- The Washington Times - Saturday, May 2, 2009

NEW YORK | Wall Street extended its rally into a third month, shrugging off more reminders of the recession and placing cautious bets on an economic recovery.

Stocks ended higher Friday after a day of quiet back-and-forth trading as investors determined that they could add to the gains of March and April despite mixed economic data and earnings reports.

The advance left the stock market’s major gauges with gains of about 1.5 percent for the week.

Wall Street has been growing more optimistic about the economy stabilizing, but the reports Friday confirmed that business conditions remain difficult and that a recovery is likely to be gradual.

A private group’s measure of the manufacturing industry showed a slower contraction in April than March. However, a separate government report said orders to U.S. factories fell more than expected in March.

Companies also reported mixed results. MasterCard Inc.’s first-quarter revenue fell short of expectations, and two major insurance companies posted losses for the quarter. A report from computer security software maker McAfee Inc. beat forecasts.

MasterCard fell $10.55, or 5.8 percent, to $172.90 after its warning about weakness in revenues.

Insurers MetLife Inc. and the Hartford Financial Services Group Inc. posted losses for the first quarter. MetLife fell $2.30, or 7.7 percent, to $27.45, while the Hartford fell 91 cents, or 7.9 percent, to $10.56.

McAfee’s profit jumped 77 percent, pushing its stock up $2.92, or 7.8 percent, to $40.46.

Earnings reports have been a major driver of the stock market over the past few weeks. The S&P 500 index, a broad measure of the market, rose 9.4 percent in April, the biggest monthly jump since March 2000.

The Dow Jones Industrial Average rose 44.29, or 0.5 percent, to 8,212.41.

The S&P 500 index rose 4.71, or 0.5 percent, to 877.52, and the Nasdaq composite index rose 1.90, or 0.1 percent, to 1,719.20.

For the week, the Dow rose 1.7 percent, the S&P 500 index added 1.3 percent, and the Nasdaq rose 1.5 percent.

The Nasdaq is up 9 percent for the year, but the Dow and the S&P 500 remain lower.

While many economic and earnings reports haven’t been as bad as expected, they’re still not good. Some analysts say the market’s enthusiasm over the early seeds of recovery is overdone.

“People keep talking about these ‘green shoots,’ but to me that implies that something is growing. But nothing is growing at this point,” said Dan Cook, senior market analyst at IG Markets in Chicago.

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