Newspaper article THE JOURNAL RECORD

Dow Rebounds after 2 Days of Losses

Newspaper article THE JOURNAL RECORD

Dow Rebounds after 2 Days of Losses

Article excerpt

NEW YORK (AP) -- Stocks plodded higher Tuesday, recovering from a brief morning dip on interest rate jitters tied to an unexpectedly strong reading on consumer confidence.

The Dow Jones industrial average gained 17.38 points to 5,711.27, reversing direction after two days of losses and closing above 5,700 for the first time this week.

Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange. Volume was light, typical for the week before Labor Day, at over 306.35 million shares, but up from Monday's volume of 281.38 million.

Broad-market indexes ended higher. The NYSE's composite index rose 1.26 to 357.15, and the Standard & Poor's 500-stock index added 2.51 to 666.39. The Nasdaq composite index climbed 9.80 to 1,149.02, while the American Stock Exchange's market value index gained 1.43 to 562.05.

Both stocks and bonds opened stronger but dipped around 10 a.m., after The Conference Board, a business research group, said its Consumer Confidence Index rose 2.4 points to 109.4.

Most economists had expected a decline to about 105.

The consumer confidence report reinforced investors' worries that strong economic growth will convince the Federal Reserve to raise interest rates to head off a resurgence of inflation. Those fears gained currency with Friday's report of a surprising 1.6 percent jump in durable-goods orders in July, and signals that Fed governors may be losing their unanimous resolve to keep interest rates steady.

Higher interest rates would be unwelcome because they erode the value of fixed-income securities, discourage consumer spending and raise corporate borrowing costs, cutting into corporate profits.

"We continue to go through this interest-rate roller coaster daily," said Joseph DeMarco, managing director at HSBC Asset Management Americas. "That's part of the reason the market hasn't made much ground here. …

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