Dow up for fourth day

It was a quiet end to a wild month for financial markets.

US stocks edged higher for a fourth straight day on a report that factory orders surged in July. The Dow Jones industrial average turned higher for the year. The Dow’s winning streak ended a tumultuous August that included four consecutive days of swings of 400 points or more, a first in the history of the index.

A surge in factory orders indicated to investors that the manufacturing industry is still healthy. Orders rose 2.4% in July, the largest increase since March, after falling 0.4% in June. That decline caused worries that manufacturing, one of the best-performing areas of the US economy since the recession ended two years ago, might be starting to sputter.

The Dow rose 53.58 points, or 0.5%, to end at 11,613.53. It fell 4.4% for the month, although it is now up 0.3% for the year. Aluminum maker Alcoa Inc. rose 3.6%, the most of the 30 companies that make up the Dow average.

Joy Global rose 1.3% after the mining equipment maker said its earnings rose 46% because of strong global demand for commodities like copper and coal.

That helped to push up other stocks in the mining and commodities industry. Equipment giant Caterpillar Inc. rose 1.3%.

The Standard & Poor’s 500 index rose 5.97, or 0.5%, to 1,218.89. It fell 5.7% for the month. Financial stocks were the worst performers in August as many worked to raise capital to comply with new regulations.

Yesterday nine of the 10 company groups that make up the index rose. The telecommunications industry was the only one to fall.

AT&T Inc. plunged 3.9% after the Justice Department filed a lawsuit to stop the company’s 39 billion merger with rival T-Mobile USA. Sprint Nextel Corp., which opposed the deal, rose 5.9%.

The Nasdaq composite index rose 3.35, or 0.1%, to 2,579.46. It fell 6.4% for the month.

The Dow, S&P and Nasdaq each had their worst August since 2001.

The market is closing out an extraordinarily volatile month. The Dow was as high of 12,132 this month and as low of 10,719 in the span of 23 trading days.

The volatility that began in late July seeped into August amid the debate in Washington over extending the country’s borrowing limit to avoid a debt default. The declines gained speed the week ended August 5, when all three major indexes entered a correction, or a decline of 10% or more from a recent peak. Investors feared that Italy or Spain – Europe’s third and fourth largest economies – would be unable to repay their debts. Some economists began to worry that the US would slip into another recession.

Then came even worse news. Standard & Poor’s lowered the nation’s credit rating, and stocks plunged. The S&P 500 hit a low for 2011 on August 8 and the Dow had four consecutive days of 400-point swings, the first time that’s happened in its 115-year history.

Stocks had their first positive week in a month the week ended August 26 after Federal Reserve Chairman Ben Bernanke said the US remains on pace for long-term economic growth. The Dow has risen for seven of the last eight days.

Bond prices have also been volatile. The yield on the 10-year Treasury note briefly fell to 1.98% on August 18, a record low, on weak manufacturing data from the Philadelphia Federal Reserve. Yesterday, the yield rose to 2.21% from 2.18% late on Tuesday.

Some investors chose to avoid the swings in stocks and bonds by parking their money in gold, but even that wasn’t entirely a safe bet. Gold hit a record high of 1,891.90 dollars an ounce August 22.

Two days later, it fell 104 dollars to 1,757.30 an ounce. It rose 1.90 dollars to 1,831.70 an ounce yesterday.