Stocks end a bit higher despite economic worries

NEW YORK - Stocks eked out gains yesterday as investors took downbeat economic news in stride.

The modest gains still left stocks with a loss for the week, but the Dow Jones industrial average and the Standard & Poor's 500 index logged their best month since November.

The latest bad news came from several corners, including the financial industry. The insurer American International Group Inc. reported a larger-than-expected fourth-quarter loss. The company said its primary insurance business was hurt in part by the economy.

The National Association of Realtors said January sales of previously occupied homes fell 7.2 percent compared with the previous month. It marked the second straight month of a big drop. Analysts had predicted a gain. The Realtors' report comes two days after the Commerce Department said that new-home sales fell last month.

Meanwhile, the Commerce Department reported that the nation's economy grew at a faster pace than initially estimated for the end of 2009. The stronger growth from the third quarter to the fourth quarter was welcome news, but analysts say much of the gain is tied to businesses' rebuilding inventories. Gross domestic product grew at an annual rate of 5.9 percent, above the 5.7 percent previous estimate. Growth is expected to slow.

The Dow rose 4.23, or less than 0.1 percent, to 10,325.26.

The broader S&P 500 index rose 1.56, or 0.1 percent, to 1,104.49.

The Nasdaq composite index rose 4.04, or 0.2 percent, to 2,238.26.

The dollar fell against other major currencies. Gold rose.

Crude oil rose $1.74 to $79.66 per barrel on the New York Mercantile Exchange.

Trading volume was light yesterday in part because of a winter storm hitting the Northeast. More than 20 inches fell in New York's Central Park.

The report from AIG brought a reminder of the strains that remain in the financial system. AIG said it lost $8.87 billion in the fourth quarter of 2009. That's improved from a year earlier but weaker than analysts expected. AIG fell $2.74, or nearly 10 percent, to $24.77.

Private-equity firm Thomas H. Lee Partners said it plans to acquire the parent of Carl's Jr. and Hardee's restaurants. The offer for CKE Restaurants Inc. totals $619 million in cash and $309 million in debt. Analysts like to see takeovers because it is a sign of confidence in the economy. CKE jumped $2.46, or 27.6 percent, to $11.37.

The Russell 2000 index of smaller companies fell 1.90, or 0.3 percent, to 628.56.