News Column

Markets Maintain September's Slip-and-Slide Trending Path

Sep. 7, 2011

By The Associated Press

market

U.S. stocks fell sharply in early trading Tuesday when it appeared that European markets were heading for a second-consecutive day of deep losses, but late-day recoveries in both the U.S. and Europe left indexes with relatively modest losses. The Dow ended down 101 points.

"It's becoming a pattern that the U.S. market breathes a sigh of relief once trading in Europe is finished," said Quincy Krosby, market strategist at Prudential Financial.

Europe's debt problems, which have simmered for more than a year, are deepening. Bailouts for Ireland and Greece haven't quelled fears that either country will default on its loans.

Italy was hit by a general strike Tuesday ahead of votes this week on a budget-cutting package needed to shore up that country's finances.

Peter Boockvar, equity strategist at Miller Tabak, said investors are becoming more fearful that the Greek government may not pay bond investors back.

September is historically the worst month for the stock market. The Dow has dropped an average of 0.9% each September since 1950, according to the Stock Trader's Almanac.

Traders expect the trend to hold true this year as uncertainty continues about Europe's debt crisis and the stagnating U.S. economy.

The Dow fell 100.96 points, or 0.9%, to 11,139.30. It's down 4% this month, its worst start to September since 2002.

The Standard and Poor's 500 index dropped 8.73 points, or 0.7%, to 1165.24. The Nasdaq composite fell 6.50 points, or 0.3 percent, to 2473.83.

Pfizer, Caterpillar and Johnson & Johnson were the only stocks among the 30 that make up the Dow to rise.

Signs of growth in the U.S. service sector helped tame concerns about another recession.

The Institute for Supply Management said the service sector grew more than analysts had expected in August.

Growth in that part of the economy, which employs nearly 90% of America's workforce, fell the three previous months.

Bank stocks fell more than the overall market. Federal regulators filed lawsuits late Friday against 17 major banks, saying they sold Fannie Mae and Freddie Mac mortgage-backed securities that lost value when the housing market collapsed.

Bank of America and JPMorgan Chase each lost nearly 4 percent.

Three stocks fell for every one that rose on the New York Stock Exchange. Volume was above average at 4.4 billion shares.



Source: Copyright USA TODAY 2011


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