Stocks Reverse Course, Edge Lower

BY

Wall Street Edges Lower After Banks Add Liquidity, Retail Sales Rise More Than Expected

Wall Street gave up a moderate gain in late trading and closed marginally lower Monday after the
Federal Reserve and other central banks added more cash to their banking systems, helping
investors set aside some concerns about credit tightness.

The New York Fed, which carries out the central bank's market operation, minutes after the
opening bell announced $2 billion in overnight repurchase agreements.

The Fed's "repo" follows a move by the Bank of Japan to put $5 billion into the markets and an
addition by the European Central Bank of $65.3 billion; the ECB added more than $200 billion last
week. The moves, following similar injections by the Fed last week, appeared to placate Wall Street for now and allowed it to focus on a week of fresh economic data. Since Thursday, the Fed has
added $64 billion in liquidity.

Monday's injection, however, was smaller than normal, perhaps reassuring some investors that the
central bank doesn't yet feel the need to pump more liquidity into the market. The last time the
Fed repurchased as little as $2 billion in one day was on Wednesday, April 18. It made a one-day
repo of $1.5 billion on May 10, but that was preceded by a separate one-day repo of $5.0 billion
earlier that same day.

The Dow Jones industrial average fell 3.01, or 0.02 percent, to 13,236.53.

BC1410

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JKL

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