Stocks Extend Gains To 4th Day; Banks Slide

TIM PARADIS

NEW YORK (AP) — Investors slowed their move into the market from a sprint to a walk.

Stocks tacked on modest gains Tuesday to extend a rally to a fourth day following a strong rise in pending home sales, the latest encouraging signal for the troubled housing market.

The Dow Jones industrial average briefly pushed into the black for 2009 but ended 35.5 points below the break-even mark. In March, the blue chips were down more than 2,200 points, or 25.4 percent, for the year.

A report showing April recorded the biggest jump in pending home sales in nearly eight years gave the market fresh fuel to push higher. But a slump in financial shares kept overall buying in check as several big banks said they would sell more stock to repay federal bailout money.

The modest moves followed huge gains on Monday, when indicators jumped more than 2 percent on positive signs for manufacturing and other good economic signals.

William Rutherford, president of Rutherford Investment Management LLC in Portland, Ore., worries that even with promising economic data the three-month rally in stocks might be overdone.