- The Washington Times - Tuesday, October 20, 2009

NEW YORK (AP) | The market stepped to new highs for the year Monday after a handful of earnings reports bolstered hopes that the economy is coming back sooner than many analysts had thought.

That’s helping some investors move past a bout of nerves about whether expectations for the economy are stretched too far. The Dow Jones Industrial Average rose 96 points, while the Standard & Poor’s 500 index advanced but ended just shy of 1,100, having topped that level during the day.

Industrial-equipment maker Eaton Corp. said it was seeing improvement in key markets and raised its full-year profit forecast. Newspaper publisher Gannett Co. managed to post a profit despite a sharp fall in revenue.

The day’s gains came ahead of quarterly earnings released after the closing bell from Apple Inc. and Texas Instruments Inc.

Apple blew past expectations because of increased sales of the iPhone, while Texas Instruments’ profit and sales came in above the improved forecast the chipmaker issued just last month. Share of both tech companies gained in after-hours electronic trading.

The reports are adding to investors’ expectations for the technology industry. Last week, Google Inc. and chipmaker Intel Corp. posted solid earnings.

The Dow rose 96.28, or 1 percent, to 10,092.19. The broader S&P; 500 index rose 10.23, or 0.9 percent, to 1,097.91. For both indexes, it was the highest close since Oct. 3, 2008. The Nasdaq composite index rose 19.52, or 0.9 percent, to 2,176.32, its highest close since Sept. 26, 2008.

The day’s advance came on the 22nd anniversary of the 1987 stock market crash known as “Black Monday,” which saw the Dow plunge a record 22.6 percent on worries about interest rates and slowing economic growth.

Meanwhile, the National Association of Home Builders said Monday this month’s housing market index, which tracks industry confidence, slipped by one point to 18, the first dip since June when the reading fell to 15. Homebuilders’ stocks slipped Monday after the release of the report. Shares of Hovnanian Enterprises Inc. led the sector drop, with shares falling 20 cents, or about 5 percent, to $3.94.

Investors grew hopeful that Federal Reserve policymakers would be able to withdraw some of the money supporting the economy as conditions improved. That could help prevent inflation, which is a worry for investors because of the huge amounts of money the government has pumped into the financial system.

The New York Federal Reserve, which carries out the central bank’s market operations, said it has been preparing plans for how it could begin weaning the economy from monetary stimulus.

The dollar mostly fell against other major currencies, while gold prices rose. Crude oil rose $1.08 to settle at $79.61 per barrel on the New York Mercantile Exchange.

Apple rose $1.81, or 1 percent, to $189.86 in the regular session and rose 6.2 percent in electronic trading after its report. Texas Instruments rose 77 cents, or 3.4 percent, to $23.52 and added 2.2 percent in late trading. Gannett shares rose $1.06, more than 8 percent, to close at $14.06.

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