- The Washington Times - Tuesday, September 15, 2009

NEW YORK | Stocks clawed back from early losses to post moderate gains as traders funneled money into utilities and industrial stocks.

Major market indexes ended at their highest levels in nearly a year.

Stocks slid at the open following a drop in overseas markets on worries that a trade war would erupt between the U.S. and China. But the market recovered from an early dip that sent the Dow Jones Industrial Average down 100 points as investors seized on the opportunity to inject new money into shares. The Dow ended with a gain of 21 points.

Arlington-based utility AES Corp. helped pull the market higher after the Wall Street Journal reported that China’s investment arm is interested in buying a stake in the company.

Analysts said the day’s modest gains were impressive, given the market’s strong run last week. They follow a powerful six-month rally that has lifted the Standard & Poor’s 500 index 55.1 percent.

“We open lower, and buyers seem to chip away, and we climb higher,” said Adam Gould, senior portfolio manager at Direxion Funds in New York. “It’s somewhat healthy that we’re rallying this way - slowly.”

The Dow rose 21.39, or 0.2 percent, to 9,626.80. It had been down about 109 points at its low.

The broader Standard & Poor’s 500 index rose 6.61, or 0.6 percent, to 1,049.34, an 11-month high. The Nasdaq Composite Index rose 10.88, or 0.5 percent, to 2,091.78.

The day’s early losses came after the U.S. government late Friday imposed trade penalties on tires coming from China. The Chinese government filed a complaint with the World Trade Organization. Investors had worried it would erupt into a tariff dispute that could damage an economic recovery.

Shares of AES rose 64 cents, or 4.5 percent, to $14.79 following the report of interest from China.

Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.42 percent from 3.35 percent late Friday.

The Russell 2000 index of smaller companies rose 6.44, or 1.1 percent, to 600.03.

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