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Stocks fall at open on US-China trade concerns

September 15, 2009|Associated Press

NEW YORK — Stocks bounced back from early losses to post moderate gains as traders funneled money into utility and financial companies.

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 as investors seized the opportunity to inject new money into shares. After sliding 69 points early on, the Dow Jones industrial average ended with a gain of 21 points.

Analysts said the gains were impressive because the Standard & Poor's 500 index already jumped 55.1% in six months.

The Dow rose 21.39, or 0.2%, to 9,626.80. The broader S&P 500 rose 6.61, or 0.6%, to 1,049.34, an 11-month high. The Nasdaq composite index rose 10.88, or 0.5%, to 2,091.78.

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

Monday's zigzags sharply contrast the tumult of a year ago, when the collapse of Lehman Bros. Holdings sent the Dow down 500 points in one day and jammed the credit markets that power the world's economies. The S&P 500 is still down 16.2% from then and 33% from its October 2007 peak.

Among stocks driving trading, utility AES rose 64 cents, or 4.5%, to $14.79 following the report that China's investment arm was interested in buying a stake in the company. General Electric gained 68 cents, or 4.6%, to $15.35 -- its first close above $15 since January.

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