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Closing Market Report
Star-Bulletin news services
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Market moves little in pre-holiday trade
By Tim Paradis
Associated Press
NEW YORK » Wall Street ended an aimless session barely lower yesterday after investors shrugged off comments about productivity by Federal Reserve Chairman Ben Bernanke and awaited the government's August employment report. The major indexes ended August with gains.
With Bernanke saying little to inspire the market in light pre-holiday trading, investors decided against making any major moves in advance of today's report on nonfarm payrolls. Wall Street is keeping a close eye on the unemployment rate both as an indicator of how quickly the economy is slowing and out of concerns over wage inflation.
There are questions among investors about whether the 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 Fed chairman, speaking before an economic and development conference in South Carolina, said productivity growth is "likely to continue for some time." He said recent reports showing a short-term slowing in productivity didn't change his view.
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 consumer spending rose in July and that core consumer inflation eased, signaling that the current economic slowdown might not be as severe as some have feared.
Also yesterday, the Labor Department released figures showing a drop in the number of recently laid off workers filing for unemployment benefits.
The Dow Jones industrial average closed modestly lower, down 1.76, or 0.02 percent, at 11,381.15. The Dow showed gains in each of the previous three sessions, and is now at a three-month high. For August over all, the Dow rose 1.8 percent, its best showing since April.
Broader stock indicators also declined Thursday. The Standard & Poor's 500 index fell 0.45, or 0.03 percent, to 1,303.82, while the Nasdaq composite index dropped 1.98, or 0.09 percent, to 2,183.75. The S&P 500 had its strongest month since January, rising 2.1 percent, while the Nasdaq added 4.4 percent for its best month since November.
"I didn't think any major market-moving number came out, everything was in line with what was expected," said David Sowerby, chief market analyst at Loomis, Sayles & Co. "We're not getting anything earth-moving out of a majority of the retail sales reports."
