- The Washington Times - Saturday, November 14, 2009

NEW YORK | Encouraging earnings news from major retailers and the Walt Disney Co. drew investors back into the stock market to cap a second big week of gains.

The Dow Jones Industrial Average gained 73 Friday after falling 94 on Thursday. Major stock indexes rose more than 2 percent for the week.

Upbeat quarterly reports from Disney as well as Abercrombie & Fitch Co. and J.C. Penney Co. offset worries about a slide in consumer confidence.

Disney said late Thursday that higher revenue at its cable, broadcast and movie studio divisions helped drive profits up 18 percent. Abercrombie’s results were better than expected, while J.C. Penney raised its earnings and sales forecasts.

The market stumbled briefly in morning trading after a report found that the mood of consumers darkened this month. The preliminary Reuters/University of Michigan consumer sentiment index for November came in at 66.0, down from 70.6 in October. That could bode poorly for the holiday shopping season.

Stocks rebounded after that report but later pared their gains as the dollar pulled off its lows of the day. The dollar’s steady slide since March, due largely to record-low U.S. interest rates, has pushed stocks and commodities higher on hopes that it would help U.S. exports, which become cheaper overseas with the weak dollar.

Lawrence Creatura, equity market strategist and portfolio manager at Federated Clover Capital Advisors, said investors looked past the consumer confidence figure to focus on earnings reports because they are a more reliable indicator about the economy.

“It’s probably safe to say that investors are rationally more focused on what consumers do rather than what they say,” he said.

The Dow rose 73, or 0.7 percent, to 10,270.47. For the week, the Dow rose 2.5 percent, after jumping 3.2 percent last week. The gains have boosted the Dow’s climb for the year to 17 percent after a slump in late October.

The broader Standard & Poor’s 500 Index rose 6.24, or 0.6 percent, to 1,093.48. The Nasdaq Composite Index rose 18.86, or 0.9 percent, to 2,167.88. The Russell 2000 Index of smaller companies rose 5.96, or 1 percent, to 586.28.

The dollar drove trading during the week, as it has for months. Randy Frederick, director of trading and derivatives at Charles Schwab, expects the tie between the dollar and stocks to continue.

“As long as interest rates stay low it’s going to be difficult for the dollar to gain any strength,” he said.

Gold rose for the ninth time in 10 days, while oil fell 59 cents to settle at $76.35 a barrel on the New York Mercantile Exchange.

Bonds mostly rose, pushing yields lower. The yield on the 10-year note fell to 3.43 percent from 3.45 percent late Thursday.

Three stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 3.9 billion shares, the lowest level in a month.

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