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Stocks fluctuate as investors look to Washington

February 10, 2009|Associated Press

NEW YORK — Stocks ended a quiet session Monday with only slight changes as economic stimulus legislation made its way on Capitol Hill and investors awaited details of how the Obama administration would reshape a rescue plan for the financial industry.

Treasury Secretary Timothy F. Geithner is scheduled today to outline President Obama's plan to overhaul the $700-billion rescue package. Congress passed the measure in the fall as the credit markets began to seize up on fears stemming from rising levels of bad debt.

Meanwhile, the Senate is expected to pass an $827-billion stimulus bill today. The government, however, still faces the challenge of reconciling the Senate bill with an $819-billion version passed by the House.

Republicans and Democrats have been at odds over the stimulus effort, which is intended to help pull the economy out of the worst recession in decades. The administration is pressing to have a version passed by Congress and on the president's desk for signing by the middle of this month.

Also today, Federal Reserve Chairman Ben S. Bernanke is expected to testify before a House committee on the central bank's efforts to revive lending during the financial crisis.

The Dow Jones industrial average fell 9.72 points, or 0.1%, to 8,270.87. The index crossed the break-even line about 50 times during the session.

Broader stock indicators were mixed. The Standard & Poor's 500 index rose 1.29 points, or 0.1%, to 869.89, and the Nasdaq composite index edged down 0.15 of a point to 1,591.56.

The Russell 2,000 index of smaller companies fell 0.6%.

Gainers outnumbered losers by about 8 to 7 on the New York Stock Exchange. Trading volume was light.

On Friday, the market largely overlooked a report of a big job loss in January and rallied in anticipation of the stimulus bill and changes to the financial bailout. The Dow industrials ended last week up 3.5%, the S&P 500 index rose 5.2% and the Nasdaq posted a huge 7.8% gain.

"Given that we had a good two-day rally and a strong performance last week, it's not surprising that we would see some softness" on Monday, said Alan Gayle, senior strategist at RidgeWorth Investments.

Financial stocks in the S&P 500, which gained 9.6% as a group Thursday and Friday in anticipation of the Treasury rescue plan, added 1.3% on Monday.

Geithner had been scheduled to announce the financial plan Monday, but the White House pushed the speech back a day to focus on the stimulus bill.

Shares of Bank of America jumped 12% on Monday, while those of General Electric, which has a big finance arm, surged 14%.

Among the day's other market highlights:

* U.S.-traded shares of Nissan Motor slumped 3.7% after the Japanese automaker said it would slash 20,000 jobs, or 8.5% of its global workforce, over the next year and projected a $2.9-billion loss for the fiscal year that ends next month.

* The Treasury debt market finished mixed. The yield on the benchmark 10-year Treasury note rose to 3.02% from 2.98% late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.34% from 0.28% late Friday.

* The dollar was mixed against other major currencies. Gold prices fell.

* Oil futures fell 61 cents to settle at $39.56 a barrel on the New York Mercantile Exchange.

* Overseas, key stock indexes rose 0.4% in Britain, 0.5% in Germany and 0.4% in France. Shares in Japan lost 1.3%.

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