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Wall Street opens higher, building on 4-day rally

March 17, 2009|Associated Press

The stock market ended a four-day winning streak Monday as a rally led by financial stocks fizzled late in the day.

Analysts said the pullback didn't necessarily signal that traders were reconsidering their newfound optimism about the financial sector, a main driver behind last week's surge of more than 9% in major stock indexes.

Some market watchers viewed the easing in stocks as reassuring.

"This is healthy," said Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York. "The best thing for this market is that we don't go up aggressively. A steady rise of a few up days then a down day would be a lot better than 1,000 points up."

The Dow Jones industrials closed down 7.01 points, or 0.1%, at 7,216.97 after being up as much as 169 points at about mid-session.

The Standard & Poor's 500 index fell 2.66 points, or 0.4%, to 753.89, while the tech-heavy Nasdaq composite index slumped 27.48, or 1.9%, to 1,404.02.

The Russell 2,000 index of smaller companies slid 1.7%.

Although the major stock indexes lost ground, advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange.

It was "a slow bleed into the close," said Ryan Larson, senior equity trader at Voyageur Asset Management. "Nothing specific hit the pavement in terms of negative news. The market's just exhausted at this point. . . . Healthy profit-taking is expected, and it happened today."

An index of financial stocks in the S&P 500 traded up as much as 5.7% during the session on positive comments about the economy by Federal Reserve Chairman Ben S. Bernanke and reassuring news about a big British bank. The index closed down 1.8%

Bernanke said Sunday that the recession would probably end this year if the government's efforts to revive the banking industry succeeded.

Britain's Barclays said it had a good start to 2009 and confirmed it had been in talks about selling its asset management unit. The company's U.S.-traded shares soared 89 cents, or 20%, to $5.31.

Last week's rally was driven by word from Citigroup and Bank of America that their businesses were stabilizing.

Although the banking sector overall ended Monday lower, Citigroup and Bank of America finished with big gains.

Citigroup jumped 55 cents, or 31%, to $2.33, while Bank of America rose 42 cents, or 7.3%, to $6.18.

David Hefty, chief executive of Cornerstone Wealth Management in Auburn, Ind., said investors had been moving in unison lately.

"Investors have a stampede mentality," he said. "They stampede in and they stampede out."

Treasury yields rose Monday as investors gravitated toward stocks for much of the day. The yield on the benchmark 10-year Treasury note rose to 2.94% from 2.88% late Friday. The three-month T-bill, considered one of the safest investments, rose to 0.25% from 0.19%.

The dollar mostly fell against other major currencies. Gold prices also dropped.

Oil futures rose $1.10 to settle at $47.35 a barrel on the New York Mercantile Exchange.

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