Stocks slipped Wednesday as investors shied from making big moves ahead of the government’s monthly reading on job losses and the unemployment rate, which comes out before the start of trading on Friday.
NEW YORK (AP) — The closer investors get to the government’s July employment report, the more cautious they become.
Stocks slipped Wednesday as investors shied from making big moves ahead of the government’s monthly reading on job losses and the unemployment rate, which comes out before the start of trading on Friday. The pullback, which took the Dow Jones industrials down 39 points, followed a 34-point gain Tuesday that was a slowdown from the previous day’s triple-digit advance.
The big concern on Wall Street is layoffs, and whether companies trying to preserve their profits during the recession are continuing to slash jobs at a furious pace. Job cuts have to slow for the economy to have a solid recovery.
The caution in Wednesday’s trading followed a disappointing report on the service sector during July. The Institute for Supply Management said its service index, a measure of the health of retail, financial services, transportation and health care companies, fell to 46.4 from 47 in June, marking the 10th straight monthly slide. A reading below 50 indicates contraction.
Still, there are plenty of signs of strength on Wall Street, and one is the fact that Wednesday’s loss was so modest. Investors have been looking for the stock market to pause after it shot higher since mid-July. The market’s occasional retreats have been mild in part because investors who missed the rally are looking to buy when prices dip.
The ISM report gave investors an excuse to cash in some gains after the furious buying of the past month. The Dow is still up 14 percent in just 18 days.
“The market has just had a pretty good advance and is looking for a reason for a pullback,” said Henry Herrmann, CEO of investment management firm Waddell & Reed.
According to preliminary calculations, the Dow fell 39.22, or 0.4 percent, to 9,280.97. The Standard & Poor’s 500 index fell 2.93, or 0.3 percent, to 1,002.72, while the Nasdaq composite index fell 18.26, or 0.9 percent, to 1,993.05.