Markets finish mostly higher

NEW YORK (AP) — Wall Street closed mostly higher Monday as investors appeared relieved that more bad news didn’t emerge about risky mortgages and shrinking credit markets. Investors seeking safety pressed into shorter-term Treasurys.

Stocks endured back-and-forth trading after a rally Friday, which came in response to the Federal Reserve’s decision to lower its discount rate. The Fed said Friday it stood ready to make further moves to keep credit and stock market losses from hurting the economy, but because it stopped short of a cut in the more important federal funds rate, uncertainty lingered on Wall Street about policymakers’ intentions. The Fed is not scheduled to meet formally until Sept. 18, which means investors could remain jittery until then.

Brian Levitt, corporate economist at OppenheimerFunds Inc., said the Fed’s move, while helpful, won’t erase all the market’s unease.

“Fed action certainly doesn’t make unsound credit sound. It allows some confidence for the higher quality deals to get done. It’s more psychological. It provides confidence that the Fed will be a stopgap and a lender of last resort.”

Monday’s showings

Treasury bonds, which have rallied in recent weeks as investors fled to safe-haven securities, continued their move higher Monday. Because bond prices move opposite their yields, the benchmark 10-year Treasury bond yields fell to 4.65 percent from 4.68 late Friday, while the shorter-duration notes such as the 3-year T bill saw yields fall sharply.

According to preliminary calculations, the Dow Jones industrials finished up 42.27, or 0.32 percent, at 13,121.35, after seeing 100-point swings higher and lower.

Broader indexes were mixed. The Standard & Poor’s 500 index slipped 0.39, or 0.03 percent, to 1,445.55; the Nasdaq composite index rose 3.56, or 0.14 percent, to 2,508.59.