NEW YORK — American International Group Inc., the insurer rescued by the U.S. government, reported its first profit in seven quarters on narrowing investment losses and a rebound in the value of some derivatives. The stock gained 20 percent in New York trading.

Second-quarter net income of $1.82 billion, or $2.30 a share, compares with a net loss of $5.36 billion, or a split-adjusted $41.13, a year earlier, New York-based AIG said yesterday in a regulatory filing. Operating income, which excludes some investment results, was $2.57 a share, beating the average estimate of five analysts surveyed by Bloomberg by $1.07.

"While our insurance companies' operating results remain challenged, largely driven by weak economic conditions and the lingering effect of negative AIG events earlier in the year, performance trends stabilized from the first quarter," said Edward Liddy, AIG chief executive officer.

ATTACK ON LONE BLOGGER REVERBERATES ACROSS WEB

NEW YORK — The outage that knocked Twitter offline for hours was traced to an attack on a lone blogger in the former Soviet republic of Georgia — but the collateral damage that left millions around the world tweetless showed just how much havoc an isolated cyberdispute can cause.

"It told us how quickly many people really took Twitter into their hearts," Robert Thompson, director of the Center for the Study of Popular Television at Syracuse University, said yesterday.

Tens of millions of people have come to rely on social media to express their innermost thoughts and to keep up with world news and celebrity gossip.

Twitter "is one of those little amusements that infiltrated the mass behavior in some significant ways, so that when it went away, a lot of people really noticed it and missed it."

The attacks Thursday also slowed down Facebook and caused problems for the online diary site LiveJournal. But Twitter, the 140-character-or-less messaging site used by celebrities, businesses and even Iranian protesters, suffered a total outage that lasted several hours.