Wall Street takes little comfort in new plans


POSTED: Thursday, February 19, 2009

NEW YORK » Investors took scant comfort yesterday from the government's plans to revive the housing market and overall economy.

Wall Street ended with only modest changes after a steep sell-off Tuesday on worries about the global economy and banks in Eastern Europe. Several attempts to rally unraveled as market indicators hovered around the lows they marked in November.

Investors reacted coolly to a $75 billion mortgage relief plan President Barack Obama introduced yesterday, which would provide incentives to mortgage lenders to help borrowers reduce their payments.

Plunging home values are at the center of the 14-month-old recession, which has been one of the most severe in decades. The announcement came a day after Obama signed into law a $787 billion economic stimulus plan.

The Dow Jones industrial average edged up 3.03, or less than 0.1 percent, to 7,555.63.

Broader stock indicators slipped. The Standard & Poor's 500 index fell 0.75, or 0.1 percent, to 788.42, and the Nasdaq composite index fell 2.69, or 0.2 percent, to 1,467.97.

The Russell 2000 index of smaller companies fell 5.72, or 1.3 percent, to 423.18.

Declining issues outnumbered advancers by about 5 to 2 on the New York Stock Exchange. Consolidated trading volume came to a light 5.65 billion shares compared with 5.78 billion shares traded Tuesday.

The government said construction of homes and apartments tumbled by 16.8 percent in January to a record low annual rate. Applications for building permits also dropped to a record low.

The government also said production at the nation's factories, mines and utilities fell a greater-than-expected 1.8 percent last month. It marked the third straight month in which production fell.

The Federal Reserve slashed its projections for the country's economic performance this year, predicting the economy will shrink this year. In its previous forecast, the Fed still held out the possibility of growth in 2009.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.75 percent from 2.65 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.30 percent from 0.29 percent late Tuesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 31 cents to settle at $34.62 per barrel on the New York Mercantile Exchange.