Wall Street dips
Wall Street ended an aimless session barely lower today after investors shrugged off comments about productivity by Federal Reserve Chairman Ben Bernanke and awaited the US government’s August employment report.
With Bernanke saying little to inspire the market in light pre-holiday trading, investors decided against making any major moves in advance of tomorrow’s report on non-farm payrolls.
The Fed chairman, speaking before an economic and development conference in South Carolina, said productivity growth was “likely to continue for some time”. He said recent reports showing a short-term slowing in productivity did not change his view.
There are questions on Wall Street about whether the US economy has slowed enough to ward off further interest rate hikes – or whether the Fed’s 17 straight increases since 2004 might have tipped the economy too far. Productivity gains make it easier for the Fed to maintain a stable rate policy.
The market was hard-pressed to hold on to gains from early in the session. It ultimately had little response to a Commerce Department report that US consumer spending rose in July and that core consumer inflation eased, signalling that the current economic slowdown might not be as severe as some have feared.
Also today, the Labour Department released figures showing a drop in the number of recently laid off workers filing for unemployment benefits.
The Dow Jones industrial average was modestly lower, down 1.76, or 0.02%, at 11,381.15. The Dow showed gains in each of the previous three sessions, and is now at a three-month high.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 0.45, or 0.03%, to 1,303.82, while the Nasdaq composite index dropped 1.98, or 0.09%, to 2,183.75.
