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Stock indexes post modest gains

Published:November 18, 2009, 7:28 AM

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Updated: August 21, 2010, 3:06 AM

NEW YORK (AP)—Stocks finished an erratic session mixed Tuesday as higher commodity prices lifted energy and materials shares.

Major stock indexes had their third straight advance, reaching new 13- month highs, but there were more declining shares than advancers on the New York Stock Exchange and the Nasdaq Stock Market. Stocks had zigzagged for much of the day on mixed news about retailers and industrial production.

A rebound in the dollar after three down days kept investors’ appetite for stocks in check. An eight-month weakening of the dollar has been lifting commodities prices and shares of U. S. exporters, which benefit from stronger foreign demand for their goods when the dollar falls. Record-low U. S. interest rates have also driven investors to seek higher returns in stocks and commodities, lifting share prices.

Trading volume remained light, signaling a lack of strong conviction behind the market’s moves.

Investors focused on retailers’ earnings reports for insight into one of the market’s biggest worries: how much consumers are spending. Home Depot Inc., Saks Inc. and Target Corp. all reported better-than-expected third-quarter results but also said they remain cautious ahead of the holiday shopping season.

“Despite the dramatic rally in the stock market, we still see the consumer operating at recessionary levels,” said Uri Landesman, chief equity strategist and senior portfolio manager at ING Investment Management in New York. Stocks have surged in the past eight months as investors anticipate a recovery in the economy.

Stocks jumped Monday on a government report that retail sales rebounded in October. Investors are looking for signs that consumer spending, one of the biggest drivers of the U. S. economy, will recover during the holidays.

A report on industrial production weighed on the market. The Fed said output at the nation’s factories, mines and utilities rose 0.1 percent in October, less than the 0.4 percent predicted by economists polled by Thomson Reuters.

Meanwhile, signs of inflation remained muted, a welcome sign for the economy. The Labor Department’s Producer Price Index, which measures inflation at the wholesale level, rose less than expected in October. The 0.3 percent rise was smaller than economists had forecast. “The market is saying inflation is not an issue,” said Tim Courtney, chief investment officer at Oklahoma City-based Burns Advisory Group. He said that’s a signal interest rates will remain low.

The Dow Jones industrial average rose 30.46, or 0.3 percent, to 10,437.42. It was the ninth gain in 10 days for the Dow and its highest close since Oct. 2, 2008, when it ended at 10,482.85. The Dow jumped 136 points Monday after the retail sales report.

The broader Standard & Poor’s 500 index rose 1.02, or 0.1 percent, to 1,110.32, while the Nasdaq composite index rose 5.93, or 0.3 percent, to 2,203.78.

Falling stocks outpaced those that rose 8-to-7 on the NYSE, where consolidated volume came to 3.9 billion compared with 4.6 billion Monday.

The Dow is up 725 points, or 7.5 percent, this month. That has some analysts saying the market has been rising too fast given problems like unemployment still facing the economy. For the year, the Dow is up 18.9 percent after rebounding from a 12-year low in March.

A bounce in crude oil helped energy stocks. Oil rose 24 cents to settle at $79.14 per barrel on the New York Mercantile Exchange.

Gold climbed 20 cents to $1,139.40. Gains in other metals spurred gains of materials companies. Platinum jumped $17.90 to $1,459 an ounce.

Bond prices edged higher to push yields lower. The yield on the benchmark 10-year Treasury note slipped to 3.33 percent from 3.34 percent late Monday.

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