US stocks slip on weaker manufacturing data

Written by Agencies
Thursday, 01 October 2009 06:52

NEW YORK: US stocks fell on Wednesday, Sept 30 as investors worried about the surprise drop in Midwestern manufacturing amid news that economy didn't sink as fast in the second quarter as earlier estimated, according to agencies.

The Dow Jones industrial average ended down 329.92, or 0.3 percent, at 9,712.28 after falling as much as 134 points. The broader S&P 500 index fell 3.53, or 0.3 percent, to 1,057.08. The Nasdaq composite index fell 1.62, or 0.1 percent, to 2,122.42.

According to reports, stocks got a lift from the government's latest reading on the gross domestic product, then plunged on news of a surprise drop in Midwestern manufacturing.

Investors remained uneasy about economic data and shifted bets as the dollar strengthened. The drop shaved only a modest amount from the Dow's 15 percent gain for the July-September period, its strongest quarter in 11 years.

The day's slide-and-bounce performance was a fitting one for the end of the quarter. When bad news hits the market, reminding investors of the economy's fragility, stocks slide. But within a few days, or even the same day, they start to recover as investors seem to grab hold of the fact that no one expects the recovery, or stocks, to have an unbroken path upward.

"Any legitimate decline in the market is just seen as a buying opportunity," said David Waddell, senior investment strategist and CEO of Waddell & Assoc. "That pattern has continued now ever since the rally began."

The slide that pulled the Dow down by more than 100 points in early trading began when the Chicago Purchasing Managers Index came in weaker than expected. Investors worried that the drop meant the national Institute for Supply Management index due Thursday also would be weak.

Not all the news rattled investors. The Commerce Department said the economy didn't sink as fast in the second quarter as it had estimated. The gross domestic product, which is the broadest measure of the economy, slid at a pace of 0.7 percent, rather than 1 percent as it had projected.

Crude oil rose US$3.90 to settle at US$70.61 a barrel on the New York Mercantile Exchange. - Agencies