November 10, 2009 / 12:47 AM / 10 years ago

Stock rally stalls but Dow ekes out gain

NEW YORK (Reuters) - U.S. stocks closed mostly lower

Traders work on the floor of the New York Stock Exchange, November 9, 2009. REUTERS/Brendan McDermid

on Tuesday as differing views on whether the market can build on recent gains stalled the S&P 500’s six-day winning streak.

The Dow industrials eked out a small gain to set a fresh 13-month high as cautious statements on the economic outlook from several Fed officials underscored the belief that easy monetary policy will remain intact well into next year.

“There’s a lot of conflicting signals as to whether we get a sharp year-end rally with money pouring in, or whether we start to see profit-taking as investors look ahead to a potential jobless recovery in 2010,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The Dow Jones industrial average .DJI gained 20.03 points, or 0.20 percent, to end at 10,246.97. The Standard & Poor's 500 Index .SPX shed 0.07 of a point, or 0.01 percent, to 1,093.01. The Nasdaq Composite Index .IXIC dropped 2.98 points, or 0.14 percent, to close at 2,151.08.

Shares of Dow component American Express Co (AXP.N) rose 1.6 percent to $39.68 after the company said credit card spending increased in October from September in another sign that the worst of the financial crisis may be over for the largest U.S. credit-card company.

Home builders’ shares took a hit, with the Dow Jones home construction index .DJUSHB down 2 percent after data from the National Association of Realtors showed home prices fell in the third quarter from year-ago levels in about 80 percent of U.S. cities.

DR Horton Inc (DHI.N) fell 3.6 percent to $11.69 and KB Home (KBH.N) dropped 3.3 percent to $14.68.

Among financials, MBIA Inc’s (MBI.N) shares plummeted 26.7 percent to $3.52 a day after the bond insurer posted a third-quarter loss.

Regional bank Zions Bancorp (ZION.O) tumbled 7.6 percent to $13.26 and the KBW bank index fell 1.4 percent.

On the upside, Monsanto Co MON.N shares rose 5.2 percent to $73.66 after the company said it had raised expectations for accelerated launches of new products.

American International Group (AIG.N) rose 3.9 percent to $37.59 after ratings agency Moody’s Investors Service said the insurer probably will be able to repay the government’s bailout and much of its preferred equity stake.

Shares of online travel agency PCLN.O jumped 17.6 percent to $204.22 a day after the company reported earnings that beat forecasts.

Volume was light on the New York Stock Exchange, with 1.07 billion shares changing hands, below last year’s estimated daily average of 1.49 billion. On the Nasdaq, about 2.01 billion shares traded, below last year’s daily average of 2.28 billion.

Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, nearly two stocks fell for every one that rose.

Editing by Jan Paschal

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