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Stocks end little changed on worries about economy
Stocks end little changed after sell-off as traders question government plans for economy
Tim Paradis, AP Business Writer
Wednesday February 18, 2009, 6:18 pm EST
Yahoo! Buzz Print NEW YORK (AP) -- Investors took scant comfort Wednesday from the government's plans to revive the housing market and overall economy.


AP - Michael Pistillo Jr., left, and Patrick Kenny, both of Barclays Capital, work at their post on the floor ...
Wall Street ended with only modest changes after a steep sell-off Tuesday on worries about the global economy and banks in Eastern Europe. Several attempts to rally unraveled Wednesday as market indicators hovered around the lows they marked in November.

Investors reacted coolly to a $75 billion mortgage relief plan President Barack Obama introduced on Wednesday, which would provide incentives to mortgage lenders to help borrowers reduce their payments.

Plunging home values are at the center of the 14-month-old recession, which has been one of the most severe in decades. The announcement came a day after Obama signed into law a $787 billion economic stimulus plan.

"I think the general consensus is the Fed, the Treasury, the government just can't seem to get out ahead of this," said Harry Rady, chief executive at Rady Asset Management in La Jolla, Calif., referring to the Federal Reserve and other agencies. "Whatever they do is already discounted and expected by the market. What we saw today was just kind of a big yawn."

The Dow Jones industrial average edged up 3.03, or less than 0.1 percent, to 7,555.63. For a second day, the blue chips managed to finish just above their November closing low.

Broader stock indicators slipped. The Standard & Poor's 500 index fell 0.75, or 0.1 percent, to 788.42, and the Nasdaq composite index fell 2.69, or 0.2 percent, to 1,467.97.

The Russell 2000 index of smaller companies fell 5.72, or 1.3 percent, to 423.18.

Declining issues outnumbered advancers by about 5 to 2 on the New York Stock Exchange. Consolidated trading volume came to a light 5.65 billion shares compared with 5.78 billion shares traded Tuesday.

Investors' caution Wednesday follows another round of downbeat news about the economy. The government said construction of homes and apartments tumbled by 16.8 percent in January to a record low annual rate. Applications for building permits also dropped to a record low.

The government also said production at the nation's factories, mines and utilities fell a greater-than-expected 1.8 percent last month. It marked the third straight month in which production fell.

The Fed slashed its projections for the country's economic performance this year, predicting the economy will shrink. In its previous forecast, the Fed still held out the possibility of growth in 2009.

Fed Chairman Ben Bernanke reiterated Wednesday that he would do everything he could do to loosen the recession's grip on the economy.

But some investors remain skeptical of the government's ability to lift the economy.

"There's a huge lack of confidence in that stimulus package," said David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Ind.

The Dow finished inches above its November low on Tuesday and Wednesday. On Tuesday, the blue chips tumbled 298 points, or 3.8 percent, to 7,552.60 -- just above its Nov. 20 close of 7,552.29, which was its lowest finish since March 12, 2003.

The Dow and S&P remain above their Nov. 21 trading lows, an important psychological barrier for traders. For the Dow, 7,449.38 was the November trading low; for the S&P it was 741.02.

Jim Herrick, director of equity trading at Baird & Co. in Milwaukee, said the market will continue to fluctuate until investors get a sense of whether the economic stimulus and housing plans are working.

"We're going to have a lot of gyrations. There's a good chance that we'll retest the lows," he said.

Bond prices fell after jumping amid the slide in stocks Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.75 percent from 2.65 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.30 percent from 0.29 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 31 cents to settle at $34.62 per barrel on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index lost 0.3 percent, and France's CAC-40 slipped less than 0.1 percent. Japan's Nikkei stock average fell 1.5 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Wall Street skids on bank fears...
Friday February 20, 2009, 7:13 pm EST

NEW YORK (Reuters) - Stocks tumbled on Friday, with the Dow industrials ending at a 6-1/2-year low, on fears the government may be forced to nationalize some big banks.

Uncertainty about how Washington will rescue beleaguered banks persisted even as the White House issued its most direct statement yet on banks, saying it supported a privately held banking system.

The S&P 500 had plunged close to a 12-year low before the White House statement.

"We have had a loss in confidence because the government keeps changing its playbook, and when that happens investors don't want to put any capital into the market," said James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis.

Citigroup (NYSE:C - News) and Bank of America (NYSE:BAC - News), which were buffeted by rumors that they were candidates for nationalization, finished down 22.3 percent and 3.6 percent, respectively.

They had been down more than 35 percent before the White House comments.

The Dow Jones industrial average (DJI:^DJI - News) fell 100.28 points, or 1.34 percent, to close at 7,365.67. The Standard & Poor's 500 Index (^SPX - News) ended down 8.89 points, or 1.14 percent, at 770.05. The Nasdaq Composite Index (Nasdaq:^IXIC - News) dipped 1.59 points, or 0.11 percent, to 1,441.23.

For the week, the Dow fell 6.2 percent; the S&P 500 slid 6.9 percent; and the Nasdaq tumbled 6.1 percent.

Investors view the stabilization of the banking sector as crucial for the economy to avert further deterioration, with both businesses and consumer lending still constrained.

Bank of America closed at $3.79, and was the most heavily traded stock on the New York Stock Exchange. Citigroup ended at $1.95, the first time since January 1991 it closed below $2.

White House spokesman Robert Gibbs told a news conference: "This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring they are regulated sufficiently by this government.

The White House statement followed comments by Senate Banking Committee Chairman Christopher Dodd, who told Bloomberg news in an interview that a nationalization of some banks could be needed "at least for a short time.

CNBC television reported the U.S. Treasury department will provide some details on the Obama administration's bank rescue plan next week, helping financial shares cut losses.

Besides financials, top drags also included energy companies, with Chevron (NYSE:CVX - News) down 2.4 percent at $65.07 amid a pullback in oil prices, and big manufacturers, with Boeing Co (NYSE:BA - News) off 3.4 percent at $36.31.

Shares of BlackBerry maker Research In Motion (Toronto:RIM.TO - News; NasdaqGS:RIMM - News) ended down 7 percent at $39.15, making it the top Nasdaq drag. Design software maker Adobe Systems (NasdaqGS:ADBE - News) , fell 7.7 percent at $18.04.

After the Dow broke through November's bear market lows on Thursday, investors worried that the S&P 500 (^SPX - News) might not be far from violating its three-month lows. There was also concern the market could retest levels not seen since 1997.

The expiration of February options may have exaggerated the intraday swings in the market on Friday as traders unwound their February positions and rolled them into March and longer-dated months.

Trading was active on the New York Stock Exchange, with about 2.12 billion shares changing hands, above last year's estimated daily average of 1.49 billion, while on Nasdaq, about 2.57 billion shares traded, above last year's daily average of 2.28 billion.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of more than 8 to 3, while on Nasdaq about five stocks dropped for every two that rose.

US stocks tumble but close well off lows
Bank unease drags on tumbling US stocks, but White House soothes
Friday February 20, 2009, 5:59 pm EST


NEW YORK (AP) -- Despairing investors keep unloading stocks -- and there are no signs that the selling will end anytime soon.


Wall Street tumbled again Friday, giving the market a painful end to another terrible week, one that left the major indexes down more than 6 percent. The reality of a protracted recession, and the likelihood that government intervention can do little to hasten its end, had investors again abandoning stocks, particularly those of struggling financial companies.

Friday's drop, which shaved 100 points off the Dow Jones industrial average, was led by financial stocks and came a day after the market's best-known indicator dropped to its lowest level since the depths of the last bear market, in 2002. And the Standard & Poor's 500 index, the barometer most closely watched by market pros, came close to its lowest point in nearly 12 years.

Wall Street has been sinking lower and lower as investors come to terms with the fact that the optimism that fed a late-2008 rally was clearly unfounded. Companies' forecasts for this year, which accompanied a dismal series of fourth-quarter earnings reports, pounded home the fact that no one can figure out when the recession will end.

"It was a market that was built on that hope and what we're seeing now is an unwinding of that," said Todd Salamone, director of trading and vice president of research at Schaeffer's Investment Research in Cincinnati, of the rally from late November to early January.

The disappointment seen this week grew out of the market's growing recognition that the multibillion dollar stimulus package and bailout program put together by the Obama administration are not likely to turn the economy around for some time.

"There were a lot of people that were banking on Washington to get us out of this. I don't know if there is anything Washington can do," Salamone said. He said the global economy is going through the tedious process of reducing borrowing and working through bad debt -- something that government help can't speed up.

With the week erasing whatever shreds of hope the market had, there is virtually no chance of a rally on Wall Street. What the market might see is a blip upward -- but blips tend to quickly evaporate.

That happened Friday. Stocks erased some of their losses after White House press secretary Robert Gibbs doused fears that the government would nationalize crippled banks. Investors who worried about seeing their shares wiped out by a government takeover welcomed the news, but it didn't erase broader concerns about the economy.

The Dow Jones industrials briefly went into positive territory, but quickly turned downward again.

Salamone said investors had been too hopeful in late 2008 and at the start of this year that the new administration would be able to quickly disentangle the economy from its troubles.

According to preliminary calculations, the Dow industrials fell 100.28, or 1.3 percent, to 7,365.67 after earlier falling more than 215. On Thursday, the Dow broke through its Nov. 20 low of 7,552.29, and closed at its lowest level since Oct. 9, 2002.

The Dow's 6.2 percent slide for the week was its worst performance since the week of Oct. 10, when it lost 18.2 percent.

The Standard & Poor's 500 index on Friday fell 8.89, or 1.14 percent, to 770.05. The benchmark most watched by traders came within less than 2 points of its Nov. 20 close of 752.44. It remains above its Nov. 21 trading low of 741.02.

The Nasdaq composite index fell 1.59, or 0.11 percent, to 1,441.23.

For the week, the S&P fell 6.9 percent, while the Nasdaq lost 6.1 percent.

Declining issues outnumbered advancers by about 3 to 1 on the New York Stock Exchange, where volume came to 2.12 billion shares.

The Russell 2000 index of smaller companies fell 5.75, or 1.38 percent, to 410.96.

Other world indicators also fell sharply. Britain's FTSE 100 declined 3.2 percent, Germany's DAX index tumbled 4.8 percent, and France's CAC-40 fell 4.3 percent.

Shares of financial bellwethers Citigroup Inc. and Bank of America Corp. plunged on worries the government will have to take control of them. Citigroup fell 22 percent, while Bank of America fell 3.6 percent. But the stocks were down as much as 36 percent during the session.

The fears about the banks are hurting shareholders of those companies and are also propelling the rest of the market downward because the broader economy can't function properly when banks aren't able to lend at more normal levels.

"Financing is the blood which runs through our nation's veins. It's what keeps us alive," said Lawrence Creatura, a portfolio manager at Federated Clover Investment Advisors.

He said the talk of nationalizing banks only underscores the troubles with the economy.

"Things are clearly not normal. It's not healthy. The patient was on life support and now what we're talking about getting out the paddle with respect to nationalization," Creatura said.

As investors dropped out of stocks, safer investments like Treasury debt and gold rose. The price of the benchmark 10-year Treasury note rose sharply, sending its yield down to 2.79 percent from 2.86 percent. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.26 percent from 0.30 percent late Thursday.

Gold broke above $1,000, closing at $1,002.20 an ounce on the New York Mercantile Exchange.

Investors are looking desperately at any safe havens simply because the stock market, which rises and falls on investors' expectations for the future, sees only trouble ahead.

"There's still a big fear factor syndrome," said Michael Strauss, chief economist and market strategist at Commonfund. "There is a focus on what is happening here and now instead of six months to nine months from now."

James Stack, president of market research firm InvesTech Research in Whitefish, Montana, said, "We're in uncharted waters," and that the evaporation of investor confidence is making the markets impossible to predict.

"Based on most historical data from the past 60 years we should be at or very close to a market bottom." But, he said, the nation is dealing with its biggest economic problems since the Great Depression of the 1930s, and that historical data is of little help right now.

Wall Street shows modest losses a day after tumble
Stocks end mostly lower after sell-off; Bernanke says recovery depends on propping up markets 
Tuesday March 3, 2009, 4:55 pm EST

NEW YORK (AP) -- Investors bruised by Wall Street's latest rout found little reason to pile back into the market.

Stocks extended their losses in an erratic session Tuesday as investors wrestled with the reality that the economy is still far from a recovery. The pessimism that has dominated the markets for months stifled some tentative bargain hunting and in the process unraveled several attempts at a rally.

The selling pushed the Standard & Poor's 500 index to its first close below 700 since Oct. 28, 1996. But the losses were modest compared with Monday, when the Dow Jones industrial average tumbled 300 points and both the Dow and the S&P 500 index registered their lowest finishes in more than a decade.

Tuesday's fluctuations came as Federal Reserve Chairman Ben Bernanke told Congress an economic recovery depends on the government's ability to stabilize weak financial markets. He said the efforts were needed to avoid "a prolonged episode of economic stagnation."

Investors are still worried the government won't succeed. On Monday, the government injected $30 billion to troubled insurer American International Group Inc., its fourth attempt to stabilize the company since September.

Bernanke's remarks came as the central bank announced it would begin lending up to $200 billion in an initial move to spur consumer and small business borrowing for autos, education, credit cards and other expenses. The Fed first announced the plan late last year.

That offered some support to the market and helped curb selling, traders said.

"I think people are just finally happy to see that it's here and that it's going to begin," said Joe Saluzzi, co-head of equity trading at Themis Trading LLC. "Normally Wall Street will buy the rumor and sell on the news but I think this is kind of the opposite effect."

According to preliminary calculations, the Dow fell 37.27, or 0.6 percent, to 6,726.02. The index is now down more than 52 percent from its record of 14,164.53 set in October 2007.

Broader stock indicators also fell. The S&P 500 index slid 4.49, or 0.6 percent, to 696.33.

The Nasdaq composite index fell 1.84, or 0.1 percent, to 1,321.01.

The Russell 2000 index of smaller companies fell 6.79, or 1.9 percent, to 361.01.

Two stocks fell for every one that rose on the New York Stock Exchange, where volume came to a moderate 1.9 billion shares.

Saluzzi said a rise prices of commodities like oil led to some speculation that global demand for raw materials could soon increase.

Light, sweet crude rose $1.50 to settle at $41.65 a barrel on the New York Mercantile Exchange. May copper futures rose 8.85 cents to $1.6045 a pound, the highest close since Feb. 9.

Investors showed little reaction to testimony from Treasury Secretary Timothy Geithner, who told the House Ways and Means Committee the added spending in the Obama administration's budget is necessary because the previous administration was unwilling to make long-term investments in health care, energy and education.

President Barack Obama on Tuesday likened the stock market to the daily tracking polls used during campaigns. He said tracking Wall Street's "fits and starts" too closely could lead to bad long-term policy.

Many investors remain fearful of buying into a market that has dashed investors' hopes that it had hit bottom. Last week, the Dow and the S&P 500 index fell through their November lows and, with their continuing pullback, are touching off fears that a new torrent of selling would take place.

Brian Reynolds, chief market strategist at New York-based WJB Capital Group, said the stock market's slide means it could be ripe for a bounce but that a lasting recovery won't come until credit market investors begin to put money into riskier debt that is now out of favor. Investors have been buying the safest types of debt, like government bonds, in favor of mortgage and credit card debt and some corporate debt.

"It's just another continuation of what we've seen for the last year and a half. If you compare the valuation in stocks to the valuation in credit, there is a huge disparity there," Reynolds said.

He contends the S&P 500 index, which is down 22.9 percent in 2009, will continue to fall until it hits the 600 level. That would be a loss of another 13.8 percent.

Investors are also beginning to look toward the Labor Department's February employment report, which is set for Friday. The monthly employment figures are one of the most important economic barometers because rising unemployment cuts into how much consumers spend. Consumer spending accounts for more than two-thirds of U.S. economic activity.

Government bonds were mixed Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.89 percent from 2.87 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.26 percent from 0.27 percent from Monday.

The dollar was mostly lower against other major currencies, while gold prices fell.

Overseas, Britain's FTSE 100 fell 3.14 percent, Germany's DAX index rose 0.52 percent, and France's CAC-40 fell 1.04 percent. Japan's Nikkei stock average slipped 0.69 percent.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

G-20 Lifts Street.......

The G-20 meeting and a change to mark-to-market rules lifted Wall Street on Thursday.

The Dow gained 216 points at the close, resting at just below the 8,000 mark. The Nasdaq gained more than 3%, or 51 points and the S&P 500 added 23.


Investors brushed aside a weak jobless claims report on growing confidence that the worst of the financial crisis may be over. Oil added $4 to $52.50 a barrel, as commodities gained ground. BHP led the advance in the metals and mining sector, jumping 8%, Rio Tinto added 6%.

In Europe, the G-20 nations agreed to overhaul the global financial system with new accounting rules and regulation.

Navistar fell 14% at the close, after the military vehicle maker filed a complaint with the Pentagon on the evaluation of its vehicles. Investors dropped the stock on concern that the issue could jeopardize Navistar's contracts. Rival Force Protection ( FRPT - news - people ) was up on the news, adding 24% at the close.

According to reports, IBM may have cut its price for Sun Microsystems (JAVA) by about a buck, to $9 or $10 a share, in exchange for greater assurance that IBM will push for the completion of the deal. Both stocks were up at the close.

Wells Fargo earnings surprise sends market surging...
Banks lead market higher after Wells Fargo says it will post $3 billion profit; Dow jumps 246 
Thursday April 9, 2009, 6:38 pm EDT


NEW YORK (AP) -- Stocks surged Thursday to their highest levels in two months after banking giant Wells Fargo & Co. surprised the market with an early profit report that blew past analysts' expectations thanks to a strong increase in its lending business.

The Dow Jones industrial average jumped nearly 250 points and major market indexes logged their fifth straight week of gains. Markets are closed for Good Friday.

Investors have been grasping at any sign of improvement in the crippled banking industry, and Wells Fargo's report Thursday that it expects first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in borrowing activity may finally be thawing. Wells Fargo said it benefited from its January acquisition of Wachovia and an increase in mortgage applications.

"The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something," said Rick Campagna, chief investment officer at 300 North Capital in Pasadena, California. "It's very good news."

The Dow and the Standard & Poor's 500 index ended at their highest levels since Feb. 9 and the Nasdaq posted its highest finish of the year, giving it a gain of 4.8 percent for 2009.

The Dow rose 246.27, or 3.1 percent, on Thursday to 8,083.38.

Broader stock indicators also put up big gains. The Standard & Poor's 500 index rose 31.40, or 3.8 percent, to 856.56. The Nasdaq composite index rose 61.88, or 3.9 percent, to 1,652.54.

For the week, the Dow added 66 points, 0.8 percent. The blue chips hadn't logged five straight weekly gains since October 2007, when the stock market hit its peak. Since the rally began March 10, the Dow has gained 22 percent, the best performance since 1933.

Even with the rapid rise in the past month the Dow is still down by 42.9 percent from its Oct. 9, 2007 high.

The S&P 500 rose 1.7 percent for the week, while the Nasdaq added 1.9 percent.

Wells Fargo's announcement injected a decisively upbeat tone into the market after three days of choppy trading. For most of the week stocks appeared to be taking a breather after barreling ahead in March. Analysts see occasional pullbacks as signs of a healthy market as investors allocate money carefully instead of just following a frenzied crowd.

Bank shares had been sluggish this week following worrisome forecasts from key analysts about the bad loans they still carry on their balance sheets and other long-term woes. Major banks begin reporting first-quarter results next week.

But Wells Fargo's performance in the first quarter neutralized some of those worries. Wells Fargo jumped 31.7 percent Thursday and other major banks also barreled higher, including Bank of America Corp., which added 35.3 percent. JPMorgan Chase & Co. rose 19.4 percent, and Citigroup Inc., up 12.6 percent.

Investors were unfazed by uneven monthly sales reports from retailers and mixed economic news.

Wal-Mart Stores Inc. reported lower-than-expected sales in March, sending its shares down 3.7 percent. It was one of only three stocks to fall among the 30 companies that make up the Dow industrials.

Target Corp. rose 6.1 percent after posting results that topped expectations, while teen clothing retailer Abercrombie & Fitch Co. slid 3.5 percent after its numbers came in weaker than predicted.

In economic news, new jobless claims fell more than expected last week, but those continuing to receive unemployment benefits set another high. The total number of laid-off Americans receiving unemployment rose to 5.84 million from 5.75 million, the most on record since 1967 and more than analysts expected.

The jump in stocks came at the end of a relatively quiet week.

Investors have been worried that corporate earnings reports that have begun to trickle in could bring bad news about how companies expect the rest of the year to turn out. But the market's tone brightened somewhat on Wednesday on reports that the government will provide support for battered life insurers and a merger deal between two major homebuilders.

Ted Aronson, a partner at Aronson-Johnson-Ortiz in Philadelphia, said Wells Fargo's upbeat preview into its earnings could place a greater burden on banks reporting results next week. Wells Fargo doesn't report its full results until April 22.

"I'm not sure everyone will be as successful, but we'd like to hope that the success will spill over," Aronson said.

The upbeat mood Thursday sent one measure of the market's unease to its lowest levels since the fall. The Chicago Board Options Exchange Volatility Index, or the VIX, ended Thursday at its lowest level since Sept. 26. That signals investors are more confident they can predict the direction of stocks.

Ordinarily what's known as Wall Street's fear gauge might be in the 18 to 20 range but it hit 89.5 in October.

Still, analysts caution that some of Thursday's buying could have reflected traders jumping to cover misplaced bets that stocks, particularly banks, would fall. Traders who sell stocks "short" are forced to step in and buy to avoid further losses.

In other trading Thursday, the Russell 2000 index of smaller companies jumped 26.08, or 5.9 percent, to 468.20.

About seven stocks rose for every one that fell on the New York Stock Exchange. Consolidated volume came to 7.3 billion shares compared with a light 5.07 billion shares traded Wednesday.

Treasury prices fell as the stock rally damped demand for safe-haven investments. The yield on the 10-year Treasury note rose to 2.92 percent from 2.86 percent late Wednesday.

The dollar rose against other major currencies, while gold prices fell.

Light, sweet crude rose $2.86 to settle at $52.24 on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average rose 3.7 percent following reports that the country's ruling party is seeking a stimulus package bigger than originally announced. Britain's FTSE 100 gained 1.5 percent, Germany's DAX index rose 3 percent, and France's CAC-40 rose 1.8 percent.

The Dow Jones industrial average closed the week up 65.79, or 0.8 percent, at 8,083.38. The Standard & Poor's 500 index rose 14.06, or 1.7 percent, to 856.56. The Nasdaq composite index rose 30.67, or 1.9 percent, to 1,652.54.

The Russell 2000 index, which tracks the performance of small company stocks, rose 12.07, or 2.7 percent, for the week to 468.20.

The Dow Jones U.S. Total Stock Market Index -- which measures nearly all U.S.-based companies -- ended at 8,744.55, up 145.21, or 1.7 percent, for the week. A year ago, the index was at 13,656.32.

Hints of stabilizing economy spark late rally
Late rally lifts market; consumer, financials stocks gain but Intel weighs on Nasdaq
Wednesday April 15, 2009, 6:25 pm EDT

NEW YORK (AP) -- Wall Street is seeing an economic glass that's half-full -- again.

Investors poured money into consumer product and financial companies Wednesday as they saw new signals that the recession could be easing its chokehold on the economy.

Stocks jumped in the last hour of trading after the Federal Reserve released a report showing glimmers of hope in U.S. business conditions. The market had drifted for much of the day on poor readings on industrial production and consumer prices. The Dow Jones industrial average ended with a gain of 109 points.

The late-day turnaround was typical of a market that has looked for reasons to push higher on hopes for a recovery ever since stocks skidded to 12-year lows in early March. A powerful five-week rally since then has pushed the market up more than 20 percent.

Technology stocks lagged after Intel Corp.'s tightlipped forecast caused jitters about a corner of the market that had drawn buyers over the past month, but the tech-focused Nasdaq composite index managed a slender advance.

Money flowed into stocks like Procter & Gamble Co., which boosted its dividend, and American Express Co., which said credit card defaults might be stabilizing. Stocks in hard-hit parts of the market like airlines and home builders bounded higher as investors bet the economy might be finding its footing.

"The market may not be seeing concrete signs of a recovery, but there are specks of light that we're on the road to stabilization," said Ryan Larson, senior equity trader at Voyageur Asset Management.

The last-hour surged pushed the Dow up 109.44, or 1.4 percent, to 8,029.62.

The Standard & Poor's 500 index rose 10.56, or 1.3 percent, to 852.06, and the Nasdaq edged up 1.08, or 0.1 percent, to 1,626.80.

The Russell 2000 index rose 7.91, or 1.8 percent, to 461.13.

An increasing stream of quarterly results from companies is likely to add to the market's fractiousness as corporate earnings season gets under way this week. Reports due Thursday from JPMorgan Chase & Co., and Google Inc. could reshape how investors feel about the financial and technology industries. Figures are also due on home construction and unemployment claims.

Traders eventually looked past some of the economic readings that came out early in the day. The government reported that production at factories, mines and utilities fell 1.5 percent in March, the fifth straight month of decline and worse than the 1 percent dip analysts expected.

Consumer prices fell 0.1 percent last month as energy prices dropped. Analysts had expected a slight increase.

Later reports revived investors' optimism. The Fed's snapshot of business conditions around the nation suggested that a slide in areas like manufacturing could be slowing. And the National Association of Home Builders said its housing market index posted its biggest one-month gain in five years in April as many homebuyers jumped on lower prices and incentives.

American Airlines parent AMR Corp. jumped 19 percent in afternoon trading after the carrier posted a $375 million loss for the first quarter that wasn't as bad as analysts had feared.

American Express said credit card defaults might be stabilizing. A 12 percent rally in the stock helped lift financial shares and gave AmEx the biggest advance among the 30 stocks that make up the Dow industrials. Some buying likely occurred as traders rushed to cover misplaced bets that predicted financial stocks would fall.

More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.5 billion shares.

Trading volume was light, which can amplify swings in the market, and some buyers may have been ready to pounce following a 2 percent slump a day earlier.

David Kelly, chief market strategist at JPMorgan Funds, said it could take months for investors to get a better sense of whether the economy has managed to break its slide.

"It's like April weather," he said. "Some days it will seem an awful lot like winter and other days it will feel like spring."

Consumer staples stocks -- considered a refuge during recessions -- posted some of the biggest gains. Procter & Gamble, the maker of Tide detergent and Crest toothpaste, rose 3.2 percent after boosting its quarterly dividend by 10 percent, to 4 cents.

Intel's earnings came in well ahead of expectations and the company said personal computer sales have "bottomed out," but investors were unnerved by Intel's decision not to provide a detailed revenue forecast. The stock fell 2.4 percent.

"We're going to continue to get bad news," said David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Ind.

Bond prices rose, pushing the yield on the 10-year Treasury note down to 2.77 percent from 2.79 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Overseas, Britain's FTSE 100 fell 0.5 percent, Germany's DAX index lost 0.2 percent, and France's CAC-40 fell 0.5 percent. Japan's Nikkei stock average fell 1.1 percent.

Banks pull stock market higher after sell-off
Banks pull market from slump after Geithner says 'vast majority' of them have enough capital
AP Business
Tuesday April 21, 2009, 5:30 pm EDT


NEW YORK (AP) -- Treasury Secretary Timothy Geithner convinced Wall Street to give banks another chance Tuesday.

Geithner's assertion that "the vast majority" of banks have enough capital pulled stocks from a slump that began with a sell-off Monday and spilled over into Tuesday morning. Geithner also told a congressional oversight committee that some banks would be allowed to repay financial bailout funds with the blessing of bank regulators.

The comments signaled that banks might not get poor marks in government "stress tests" designed to determine whether banks have enough capital to survive if the economy turns even worse. The results are due May 4.

"There is the hope that everything will be well after the stress test," said John Nichol, senior portfolio manager at Federated Investors.

The Dow Jones industrial average jumped 128 points after tumbling 290 points Monday on worries about bad debt at banks and the implications of the stress tests. The drop punctuated a six-week rally that lifted stocks more than 20 percent from their lowest levels in more than a decade.

Stocks fluctuated in the early going Tuesday after a string of lackluster earnings reports and forecasts stoked worries about how quickly the economy can recover.

Bank stocks, which led the market lower Monday, bounced back after the Geithner comments. JPMorgan Chase & Co. rose 9.6 percent, Citigroup Inc. jumped 10.2 percent, while Goldman Sachs Group Inc. rose 4.7 percent.

The fortunes of bank shares have largely dictated the stock market's direction since the fall of Lehman Brothers Holdings Inc. in mid-September, and investors took Geithner's comments as a reason to go back into the market. Some analysts attributed the buying to short covering, where investors have to buy stock after having earlier sold borrowed shares in a bet that the market would fall.

The Dow rose 127.83, or 1.6 percent, to 7,969.56.

Broader stock indicators showed the biggest gains. The Standard & Poor's 500 index rose 17.69, or 2.1 percent, to 850.08, and the Nasdaq composite index rose 35.64, or 2.2 percent, to 1,643.85.

Huntington Bancshares Inc. logged one of the more notable turnarounds. The regional bank fell as much as 26 percent in early trading before ending up 34 cents, or 10.9 percent, at $3.45.

The jump in most banks overshadowed mixed results from big-name companies. Coca-Cola Co. and drugmaker Merck & Co. posted results or issued forecasts that fell short of what the market expected. Wall Street was uneasy about some of the reports because analysts had set low expectations after a bruising January in which fourth-quarter results short-circuited a stock rally.

Coca-Cola fell $1.24, or 2.8 percent, to $43.09, after its first-quarter earnings fell 10 percent because of restructuring charges and write-downs. The beverage maker's earnings were in line with Wall Street's expectations but sales fell short.

Merck reported a 57 percent drop in first-quarter earnings because of a slide in both sales of its drugs and income from its partnership on cholesterol medicines. Merck fell $1.68, or 6.7 percent, to $23.54.

Investors moved into shares of Caterpillar Inc., DuPont and United Technologies Corp. after their reports.

Construction equipment maker Caterpillar posted better-than-expected earnings but reduced its forecast. Caterpillar rose 91 cents, or 3 percent, to $31.39.

DuPont said its first-quarter profit dropped on falling demand. The chemical company also cut its full-year forecast and said it will increase its efforts to cut fixed costs. DuPont rose $1.32, or 4.9 percent, to $28.06.

United Technologies rose $2.18, or 4.8 percent, to $47.99 after the parent of Otis elevators and Sikorsky Aircraft posted results that were in line with expectations and reiterated its full-year forecasts.

Among banks, JPMorgan rose $2.84, or 9.6 percent, to $32.53, while Citigroup rose 30 cents, or 10.2 percent, to $3.24. Goldman Sachs rose $5.35, or 4.7 percent, to $120.36. Morgan Stanley rose $1.13, or 4.8 percent, to $24.65.

In other market moves, the Russell 2000 index of smaller companies rose 17.56, or 3.9 percent, to 470.05.

About four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.7 billion shares.

Bond prices fell. That pushed up the yield on the benchmark 10-year Treasury note to 2.90 percent from 2.84 percent late Monday. The yield on the three-month T-bill rose to 0.15 percent from 0.12 percent Monday.

Crude for July delivery rose 4 cents to settle $48.55 a barrel on the New York Mercantile Exchange.

The dollar was mixed against other major currencies while gold prices fell.

Overseas, Britain's FTSE 100 slipped 0.1 percent, Germany's DAX index rose 0.3 percent, and France's CAC-40 rose 0.2 percent. Japan's Nikkei stock average fell 2.4 percent.

Dow Jones Industrial Average...

The Dow is consolidating in a narrow range between 7800 and 8200, favoring continuation of the bear market rally. Upward breakout would signal a test of 9000, while reversal below 7800 would indicate that the rally has ended and a test of 6500. Twiggs Money Flow (21-Day) breakout above 0.1 would signal trend strength, while reversal below zero would warn of a down-swing. In the long term, the primary trend continues downward and test of primary support at 6500 remains likely.

Dow Jones Industrial Average...

An impending sharp contraction in manufacturing, caused by collapse of the auto industry, is likely to result in massive layoffs — sending shockwaves through the entire economy. Even the buoyant tech sector will not be immune.

The Dow so far appears to be ignoring the risk, forming a narrow consolidation which is normally a continuation pattern. But reversal below 7800 would warn of a down-swing to test primary support at 6500. And a fall below 7500 would confirm.

May 3, 2009- Market Summary
It was another week of positive returns despite an onslaught of less-than-ideal news releases. Investors shook off reports of contracting manufacturing orders, pandemic concerns over the new "swine flu" virus, the lowest level of auto sales in 30 years and mixed earnings results. Even though negative news dominated the headlines, things are not as bleak as they sound when you look at the returns that the market has been able to produce. Last week's gain completed the best monthly performance in the markets since March 2000. The sharp rally that lasted through all of April now leaves many investors wondering whether the momentum can continue in May or if the markets are getting ready to stage a pullback. From a technical perspective, several key indicators, such as the relative strength index, are nearing overbought territory, which suggests that the upside could be limited from here on out.

The main catalyst to watch in the week ahead will undoubtedly be the results from the bank stress tests, which are due out on May 7. The future of the recent rally could hinge on the results of these tests, so stay tuned.

The charts of interest this week are of the Dow and S&P500 because they are quickly approaching the 200-day moving average. Many active traders will be keeping a close eye on these levels because they have historically been used to determine the direction of the market. A break above the 200-day moving average could trigger a long-term shift in sentiment.

Stocks slip as traders take profits after surge
Street slips as traders take profits after big jump; 'Stress test' results loom; Dow falls 16

NEW YORK (AP) -- Sometimes a down day on Wall Street can be a good thing -- especially when it shows that investors are carefully weighing their next steps.

Traders collected a few profits Tuesday, leaving the major indexes with fairly modest losses, as the market waited for key reports on the government's assessment of banks' health and the latest numbers on jobs.

But stocks held on to most of their gains from Monday, which saw the Standard & Poor's 500 index recoup the last of its losses since the beginning of the year. That advance came on hopeful signs in the housing market and extended a two-month rally that brought stocks up from 12-year lows.

"Today's action, just drifting around, is not that surprising given Monday's rally," said Darin Newsom, a senior analyst at DTN in Omaha, Neb.

Many analysts believe it's actually good for the market to pause after a big advance, particularly when Wall Street has had its best two-month performance in nearly 35 years. Tuesday's showing proved that investors aren't buying with abandon, and are considering whether they want to put more money into stocks given the challenges the market faces later this week.

On Thursday, the government will release results of its stress tests on banks, and on Friday, the Labor Department issues some of the most closely watched data on the Street, its monthly tally of job losses and unemployment.

The Dow fell 16.09, or 0.2 percent, to 8,410.65.

The Standard & Poor's 500 index fell 3.44, or 0.4 percent, to 903.80. The modest pullback left the index essentially flat for the year to date. The S&P 500 is widely used as a benchmark for mutual funds and other investments.

The Nasdaq composite index lost 9.44, or 0.5 percent, to 1,754.12, and the Russell 2000 index of smaller companies fell 4.27, or 0.8 percent, to 502.55.

About eight stocks fell for every seven that rose on the New York Stock Exchange, where volume came to 1.5 billion shares.

Investors showed little reaction to the day's economic data, including a private report on the service sector that showed a seventh straight month of contraction. However, the pace of that decline slowed more than expected -- further evidence that the economy's slide is moderating.

Investors are mindful that the stock market typically turns around, on average, about four months ahead of the economy, so stocks tend to rise even when economic data still isn't robust. The S&P 500 is up 33.6 percent since Wall Street's rally began March 10. The Dow is up 28.5 percent.

Liz Ann Sonders, chief investment strategist for brokerage Charles Schwab & Co., said at a press briefing in New York that the economy could have stopped sliding.

"There is some chance -- it may not be more than a slim chance -- but some chance that we may actually already be out of the recession," she said.

Still, the market could easily decide to take a less optimistic view of what it sees.

"Over the past several weeks we've come through a period where all data was interpreted through rose-colored glasses," said Lawrence Creatura, portfolio manager at Federated Investors. "Now, it's a question of whether investors continue to have that perspective."

A keen point of interest for the market right now is what the government will say Thursday when it releases the results of the bank "stress tests," which will determine which banks may need to raise more capital.

The Wall Street Journal reported that about 10 of the 19 financial institutions undergoing the tests will be required to boost their capital levels as a buffer against potential future losses. The report cited several unidentified people familiar with the matter.

Regulators have said no large institution would be allowed to fail, and have pledged government funds if necessary.

Financial stocks were mixed. Bank of America Corp. rose 46 cents, or 4.4 percent, to $10.84, while Wells Fargo & Co. fell 98 cents, or 4 percent, to $23.27.

Dow component Kraft Foods Inc. said its first-quarter profit rose a better-than-expected 10 percent even as sales dropped. Shares of the maker of Velveeta, Oreo cookies and Maxwell House coffee rose 96 cents, or 4 percent, to $25.22.

Bond prices dipped, pushing the yield on the 10-year Treasury note up to 3.17 percent from 3.16 percent late Monday. Mortgage rates were mixed. The average overnight rate for a 30-year fixed rate was 5.03 percent, up from 4.86 percent last week, according to Bankrate.com.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 63 cents to settle at $53.84 per barrel on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 rose 2.2 percent, Germany's DAX index fell 1 percent, and France's CAC-40 fell 0.4 percent. Markets in Japan were closed for a holiday.

Stocks surge on relief over unemployment, banks
Wall Street storms higher on relief over jobs data, results of bank tests; Dow jumps 165
On Friday May 8, 2009, 6:11 pm EDT


NEW YORK (AP) -- As far as Wall Street is concerned there is no bad news anymore.

At least for now, traders are seeing news about longtime trouble spots like banking and unemployment in a strictly positive light.

Surging bank stocks have lifted the Standard & Poor's 500 index a dizzying 37.4 percent since early March, when the benchmark for many mutual funds and other investments skidded to a 12-year low. The index is still down 40.6 percent from its high in October 2007.

"We trust the rally," said Chris Hyzy, chief investment officer at US Trust. He said the rapid climb since March 9 is justified because investors are no longer running from worries about a possible depression.

On paper, U.S. stocks have gained nearly $2.9 trillion in value since the rally started.

The latest fuel for the ascent came from news that job losses slowed in April and that big banks don't need as much capital as some investors had feared.

The Labor Department said employers cut 539,000 jobs last month -- the fewest in six months and much fewer than analysts had expected.

Bank shares surged after the government released report cards on the nation's 19 largest financial institutions. With the "stress tests" results out and easing fears about the stability of banks, investors could check another item off their list of worries.

"Getting past the stress tests was a milestone," said Jim Dunigan, managing executive of investments for PNC Wealth Management. "That was a cloud hanging over our head for the past several months. The good news is there were no surprises."

The dissipating worries sent the Dow charging higher by 164.80 points, or 2 percent, to 8,574.65. The Standard & Poor's 500 index rose 21.84, or 2.4 percent, to 929.23, and the Nasdaq composite index rose 22.76, or 1.3 percent, to 1,739.00.

For the week, the Dow is up 4.4 percent, trimming its losses for 2009 to only 200 points, or 2.3 percent. It was the eighth gain for the index in nine weeks. The S&P 500 index jumped 5.9 percent, while the Nasdaq composite index rose 1.2 percent after logging bigger gains in recent weeks than other indicators.

Bank stocks drove Friday's advance. Investors were relieved that 10 of the 19 companies will need to raise about $75 billion in new capital as a buffer against losses if the economy worsens.

"If anything, the market is reading this more as a sign of approval than a bad sign for the weaker banks," said Jim Sinegal, equity analyst at Morningstar.

Citigroup Inc. rose 21 cents, or 5.5 percent, to $4.02, and Bank of America Corp. rose 66 cents, or 4.9 percent, to $14.17. Regional bank Fifth Third Bancorp soared $3.14, or 59 percent, to $8.49.

The KBW Bank Index, which tracks 24 of the nation's largest banks, jumped 12.1 percent.

Though analysts believe many challenges remain, the market has demonstrated an ability to maintain its gains, putting in its best two-month performance in nearly 35 years.

"Every economic report, every earnings release is going to continue to paint a picture of an economy that is on the mend and that is going to form the foundation for this rally, which I think is sustainable," said Jack Ablin, chief investment officer at Harris Private Bank.

Even the battered labor market has been showing signs of moderation. On Thursday, the government said new applications for unemployment benefits fell unexpectedly last week to the lowest level in 14 weeks.

But unemployment often continues to creep higher after recessions end so analysts focused on the drop in job losses in April. The government said Friday that the unemployment rate climbed to 8.9 percent in April -- the highest level since 1983. And economists said government hiring of temporary workers for the 2010 census helped blunt the job losses.

"The news is never all good when you've hit bottom," said Alan Skrainka, chief market strategist at Edward Jones. "But that doesn't change our view that the rate of decline is slowing."

Many market watchers are encouraged.

Liz Ann Sonders, chief investment strategist for brokerage Charles Schwab & Co., said during the week that the recession might already have ended.

Even rising energy prices have been a good sign because traders are betting that an improving economy will require more resources.

Oil rose $1.92 to settle at $58.63 a barrel on the New York Mercantile Exchange on Friday and gasoline futures closed at their highest levels since November.

That helped energy stocks. Chevron Corp. gained $2.40, or 3.5 percent, to $70.38, while Exxon Mobil Corp. rose $1.87, or 2.7 percent, to $70.80.

In other trading, the Russell 2000 index of smaller companies rose 18.88, or 3.8 percent, to 511.82 and is now up 2.5 percent for the year.

About six stocks rose for every one that fell on the New York Stock Exchange, where volume came to 7.9 billion shares compared with 8.7 billion shares traded Thursday.

The dollar was mixed against other major currencies. Gold prices slipped.

Overseas, Britain's FTSE 100 gained 1.4 percent, Germany's DAX index rose 2.3 percent, and France's CAC-40 added 1.9 percent. Japan's Nikkei stock average rose 0.5 percent.

The Dow Jones industrial average closed the week up 362.24, or 4.4 percent, at 8,574.65. The Standard & Poor's 500 index rose 51.71, or 5.9 percent, to 929.23. The Nasdaq composite index rose 19.80, or 1.2 percent, to 1,739.00.

The Russell 2000 index, which tracks the performance of small company stocks, rose 12.37, or 2.5 percent, for the week to 511.82.

The Dow Jones U.S. Total Stock Market Index -- which measures nearly all U.S.-based companies -- ended at 9,509.08, up 510.35, or 5.7 percent, for the week. A year ago, the index was at 14,121.06.

Stocks fall on weak retail sales, foreclosure jump
Wall Street pulls back after weaker-than-expected retail sales report, jump in foreclosures
On Wednesday May 13, 2009, 5:41 pm EDT


NEW YORK (AP) -- Investors are looking at the economy more skeptically.

Stocks retreated more than 2 percent on Wednesday and bond prices rose after two reports suggested the economy is not bouncing back as quickly as investors hoped.

The Commerce Department said retail sales unexpectedly fell in April for the second straight month, while RealtyTrac Inc. reported a troubling rise in home foreclosures.

Investors are mindful that the Dow Jones industrial average spiked 31 percent from its early March lows -- the biggest jump in such a short span since the 1930s. After Wednesday's decline the index is still up 26.5 percent from March 9, but investors are now wondering if the market will see a sharper pullback.

Analysts say a drop of 10 percent from the market's recent peak would hardly be surprising, especially since recent economic readings have failed to beat forecasts.

"Overall, it's just a market that's due for a pause, due for a pullback, due for consolidation," said Quincy Krosby, chief investment strategist for The Hartford. "You don't want markets to skyrocket. The higher you go, the deeper you fall."

Few analysts, however, anticipate the stock market to sink lower than it did in March.

"What we've done over the past month-and-a-half is remove this idea of Armageddon," said Charlie Smith, chief investment officer at Fort Pitt Capital.

The Dow fell 184.22, or 2.2 percent, to 8,284.89.

Broader stock indicators sank even more sharply. The Standard & Poor's 500 index fell 24.43, or 2.7 percent, to 883.92, while the Nasdaq composite index declined 51.73, or 3 percent, to 1,664.19.

During the market's two-month advance, investors grew accustomed to data indicating that the economy, while not growing, was at least bottoming out. This week, unexpectedly worse data has thrown a wrench into the works.

On Wednesday, economists predicted April retail sales would be flat, but instead they fell, and March's sales decline was revised to an even larger drop.

Macy's Inc. offered another sign that consumer spending is not on the rebound. The department store operator said its loss in the first-quarter widened from a year ago to $88 million. Macy's fell 83 cents, or 6.7 percent, to $11.52.

Meanwhile, the main driver of the recession -- the collapsing housing market -- has yet to turn around. RealtyTrac data said April's foreclosures were up 32 percent from a year ago, and up slightly from March. It was the second straight month that more than 340,000 U.S. households received a foreclosure filing.

More economic data is on the way this week. Nicholas Colas, chief market strategist at BNY ConvergEx, said Thursday's weekly unemployment claims report is weighing on the market. The release will be the first to fully incorporate plant closings at Chrysler LLC -- making it a "real wild card," he said.

"As a trader," he said, "do you want to build positions ahead of the number?"

Financial stocks once again drove the market. The KBW Bank Index, which tracks 24 of the nation's largest banks, fell 6.5 percent.

Krosby pointed to both stock and bond offerings by banks, which dilute current shareholders, and news that the Obama administration wants a say in executive pay at financial institutions.

Bond prices rose on Wednesday's negative economic news, pushing the yield on the benchmark 10-year Treasury note, a benchmark for key borrowing rates such as home mortgages, down to 3.12 percent from 3.18 percent late Tuesday. The yield on the three-month T-bill slipped to 0.16 percent from 0.17 percent.

About 9 stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 6.7 billion shares, little changed from Tuesday.

The dollar mostly rose against other major currencies, while gold prices also rose.

The Russell 2000 index of smaller companies fell 23.36, or 4.7 percent, to 471.82.

Overseas, Japan's Nikkei stock average rose 0.5 percent. Britain's FTSE 100 declined 2.1 percent, Germany's DAX index declined 2.6 percent, and France's CAC-40 fell 2.4 percent.

The biggest gainer in the Dow was General Motors Corp., which dropped to its lowest price since April 1933, and then attracted bargain hunters. GM ended up 6 cents, or 5.2 percent, at $1.21.

CME Group Inc., the parent company of the Chicago Board of Trade and the Chicago Mercantile Exchange, rose $15.62, or 6 percent, to $274.10. A draft letter to Congress said the Treasury Department wants a central electronic-based system to track the buying and selling of over-the-counter derivatives.

Retail sales dip raises worries about recovery
Retail sales dip, foreclosures rise in April, raises new worries about start of recovery
On Wednesday May 13, 2009, 5:56 pm EDT

WASHINGTON (AP) -- Retail sales fell in April for a second straight month, dashing hopes that consumer spending was starting to revive and would help end the recession.

Economists said families who are worried about layoffs and unpaid job furloughs are saving more and spending less, delaying the start of a sustained recovery.

The disappointing report helped send stocks down on Wall Street, where the Dow Jones industrial average slid 184 points -- more than 2 percent. Other major indexes fell even more sharply.

Retail sales fell 0.4 percent last month, worse than the flat performance many economists had expected, the Commerce Department reported Wednesday.

Retail sales had posted gains in January and February after falling for six straight months. The gains had raised hopes that the crucial consumer sector of the economy might be stabilizing. But the setbacks in March and April retail sales cast doubts on that prospect.

"People are obviously still very nervous and not spending," said David Wyss, chief economist at Standard & Poor's in New York. "The economy is still in a recession, and I don't think we will hit bottom until late summer or early fall."

Meanwhile, more than 342,000 households received at least one foreclosure-related notice in April, up 32 percent from the same month last year, RealtyTrac Inc. said Wednesday. April was the second straight month with more than 300,000 households receiving a foreclosure filing.

Analysts said the economy should benefit in coming months from the tax relief included in the $787 billion stimulus plan Congress passed in February. But the extra $17 a week that the average family will receive won't translate into a major boost in spending.

Such modest relief is hardly enough to negate the effects of layoffs and employee furloughs, shrunken retirement accounts and home equity, and consumers struggling to boost savings because of fears about the future.

Mary Goodman has stopped most of her extraneous spending -- like meals out. She reined in her spending habits after March 1, when she was laid off from her job as an office manager at an online job posting company in Milwaukee.

Now the 60-year-old Goodman eats out just once a week with a former co-worker, a trip that included soup at an indoor market on Wednesday afternoon.

"I'm not doing any clothes shopping," she said. "I'm not tempting myself by going into the mall."

Anecdotal evidence had signaled some improvement in sales in recent weeks. But "to offset the plunge in wealth, the household saving rate still needs to double from the current rate of 4 percent," Paul Dales, U.S. economist with Capital Economics in Toronto, wrote in a research note.

"With falling employment hitting incomes, this can only be achieved by a further retrenchment in spending."

The savings rate, which was hovering around zero a year ago, has climbed to just above 4 percent. Many economists think it will hit 6 percent or more this year as workers anxious about layoffs and depleted investments put away their credit cards. The jobless rate rose to a 25-year high of 8.9 percent in April, with a net total of 539,000 jobs lost during the month.

The fall in retail sales in April came even though car sales posted a 0.2 percent increase. Excluding autos, the drop in retail sales would have been 0.5 percent -- much worse than the 0.2 percent gain economists had expected.

Sales other than autos showed widespread weakness last month. Demand at department stores and general merchandise stores fell 0.1 percent. Sales at specialty clothing stores dropped 0.5 percent.

Sales also fell in April at furniture stores, electronic and appliance stores, food and beverage stores and gasoline stations, the Commerce Department said.

The sales drop at department stores and specialty clothing stores came as a surprise since the nation's big chain stores had reported better-than-expected results for April. Same-store sales rose 0.7 percent last month compared with April 2008. It was the first overall increase in six months, according to the tally by Goldman Sachs and the International Council of Shopping Centers.

The two reports aren't comparable, analysts noted. The government figures, for example, cover more stores and are adjusted for seasonal variations.

Analysts said one reason the consensus forecast may have been too optimistic is that with many stores closing, it's been difficult to estimate industry figures accurately.

Department store operator Macy's Inc. on Wednesday reported a wider loss for the first quarter, due partly to restructuring charges. Still, the company expects to see an improvement in sales from its localization efforts beginning in the fourth quarter of 2009, and in the spring of 2010.

Liz Claiborne Inc. also reported a first-quarter loss that was worse than Wall Street expected. The apparel maker said its quarterly loss swelled on restructuring charges and a drop in same-store sales stemming from lower consumer spending and an extra week of sales in the year-ago period.

In a separate report, the Commerce Department said business inventories fell 1 percent in March, a seventh straight decrease. That's the longest stretch since businesses cut inventories for 15 straight months in 2001 and 2002, during the last recession.

Businesses are cutting stockpiles amid declining sales, a development that has intensified the current downturn. Still, the reductions in stockpiles eventually should help businesses get their inventories more in line with reduced sales. If that occurs, any strengthening in consumer demand should lead to increased production.

Consumer spending grew 2.2 percent in the first quarter of the year, after posting back-to-back quarterly declines in the last half of 2008.

Economists think the overall economy, as measured by the gross domestic product, will show a decline of around 3 percent in the current quarter. That would compare with steep declines of more than 6 percent each in prior two quarters, the worst six-month performance in a half-century.

"The weak start to second quarter consumer spending is a potent reminder that that the recession is not over, despite signs of green shoots," said Stuart Hoffman, chief economist at PNC Financial.

Goodman needs no such reminder. Despite her reduced spending, she said her son likely will have to move home from college because she can't pay his rent.