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The Wall Street Journal, July 28, 2009

Stocks finished modestly higher after trading in a narrow range, as a jump in new-home sales and gains in the financial sector offset lackluster earnings elsewhere.

Traders said the session was marked both by profit-taking and late-month rebalancing by portfolio managers, some of whom were scrambling just to get into the market after missing the run-up of the past two weeks.

The Dow Jones Industrial Average traded in negative territory for most of the day but ended with a 15.27-point gain at 9108.51, its highest close since early November. A 4.6% jump in component Bank of America helped the blue-chip measure, but it was held back by a 1.6% drop in Verizon Communications following a weak earnings report. Most of the buying came in the last 15 minutes of trading.

"The longer you go each day lately without any concerted selling, the more the path of least resistance is higher heading into the close," said Mike Mainwald, a trader at Lek Securities in New York. "People are more worried at this point about the upside risk of missing out on rallies" than the chances of an unexpected market drop.

With four trading days left, the Dow is up 7.8% in July.

The Standard & Poor's 500-stock index rose 2.92 points to 982.18, with a 1.5% gain in its financial sector. Regional banks and insurers, which had lagged behind big investment banks through most of the recent rally, led the way higher Monday. Regions Financial rose 8.9%.

The 11% increase in new-home sales in June was the third increase in a row and a much bigger gain than economists expected, a trend that Roger Volz, director of equities at BGC Partners in New York, said could boost the value of small banks' mortgage portfolios.

Treasury prices fell as the government began a series of auctions to raise more than $205 billion. The yield on the benchmark 10-year note rose to 3.711%, the highest in more than a month.

Roger Volz Comments: Late Push, Financials Lift Dow 15.27 Points - The Wall Street Journal

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