Stocks rise at start of week chock-full of policy decisions

NEW YORK —
The stock market shook off a late bout of selling to snap its painful
three-day losing streak Monday. But the overall tone remained cautious
and trading light ahead of key economic-policy developments expected
over the next few days.

The Dow Jones Industrial Average was up 84 points at
its intraday high and ended with a 23.88-point gain, up 0.2 percent, at
10,196.86 after shedding 552 points over its recent three-day slide.
The S&P 500 was up 0.5 percent, helped by gains in every sector
except health care, which was flat.

The Nasdaq Composite Index was up 0.3 percent,
helped by a 2.7 percent gain in Apple ahead of its earnings report due
after the closing bell.

As often happens after a market slide lasting
several days, some buyers seized an opportunity to snatch up shares
they had previously been eyeing at reduced prices.

But many also held back ahead of several political and economic events later this week, including hearings on the bailout of American International Group,
the president’s State of the Union address, a Federal Reserve
interest-rate decision and an expected vote on reconfirmation of
Federal Reserve Chairman Ben Bernanke.

“It’s almost like earnings have moved to the back burner for now,” even though Wall Street is in the midst of the fourth-quarter reporting season, said David Bellantonio, head trader at Instinet, a New York brokerage.

After two straight days with more than 6 billion shares traded, volume tailed off. Composite turnover in New York Stock Exchange-listed companies hit 4.6 billion shares.

American Express was the
Dow’s worst performer, with the credit card issuer down 2.1 percent,
extending last week’s losses. Also weighing on the Dow, Kraft Foods fell 0.7 percent, after Italian confectioner Ferrero formally ruled out launching a rival bid for Cadbury PLC, paving the way for Kraft to complete its buyout of the U.K. company.

AK Steel Holding rose 5.4 percent after announcing that it swung to a fourth-quarter profit, helped by an increase in steel shipments.

Analysts who fretted over potential global
tightening last week were comforted when investors piled into the Greek
government’s new euro5 billion ($7 billion), five-year syndicated bond issue, registering more than euro20 billion of orders in around three hours.

In the U.S., new data from the National Association of Realtors
showed a larger-than-expected plunge in existing-home sales in December
after three straight increases that were aided by a government tax
credit.

—

(c) 2010, MarketWatch.com Inc.

Visit MarketWatch on the Web at http://www.marketwatch.com

Distributed by McClatchy-Tribune Information Services.