| Fed Inaction Contributes To Losses On Wall Street |
| Aug-01-2012 |
| Keywords: stocks, down, fed, federal reserve, private sector jobs, manufacturing, interest rates, monetary policy |
Stocks end the session with another less than inspiring performance on Wall Street.
The Dow Jones Industrial Average fell 33 points, to close back below 13,000. The Nasdaq Composite slipped 19, the S&P 500 finished down 4 points.
Market participants today digesting a lot of news, none of which seemed to ease anxiety leading up to tomorrow's interest rate and monetary policy decisions in Europe.
The Federal Reserve today issued a barely revised statement from it previous monetary policy meeting. The Fed saying that it sees interest rates remaining near zero well into 2014. It re-iterated it commitment to maintain Operation Twist through the end of this year. The central bank warned that economic activity will pick up only slowly after decelerating somewhat during the first half of the year. The FOMC, however did alter its language with regard to what or whether it will take any action to stimulate economic growth. The FOMC saying that it will closely monitor the economy and provide accommodations when needed. That statement being interpreted by some to mean the Fed is closer to taking action.
There were also a number of economic reports out today, which painted a mixed picture on the strength of the economy.
The private sector added 163,000 jobs in July, according to ADP. Analysts had been expecting an increase of 120,000. The gains were driven by small and medium-sized businesses, which added 73,000 and 67,000 jobs, respectively.
However reaction to that news was tempered by a weaker than expected reading on manufacturing activity in July. The ISM manufacturing index rose to 49.8 in July from 49.7 in June. Economists were expecting a reading of 50.2.
On the corporate front, U.S. automakers report U.S. monthly sales on the day. Chrysler posted its best July since 2007, selling 126,089 units, representing an increase of 13% from the same month last year. General Motors reported its vehicle sales dropped 6% to 201,237 in July compared with a year ago as sales to rental fleet customers plunged 41%.
Oil prices ended the session modestly higher, getting a boost from a steeper than expected drop in weekly crude oil inventories. The September crude contract settled at $88.91 a barrel. |
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Posted by Lou Dobbs Staff at 12:00 PM Email to a friend |
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