Posted on: Wednesday, June 1, 2005
Manufacturing sector drags down stock prices
By Seth Sutel
Associated Press
NEW YORK — A surprisingly weak reading on the manufacturing sector sent stocks mostly lower yesterday as investors feared that the economy has indeed run into a soft patch. The report overshadowed an improvement in consumers' view of economic conditions.
The Chicago indicator is a closely watched barometer of manufacturing activity.
The news outweighed the positive effect from the Conference Board's consumer confidence index. That index rose to 102.2 in May from a revised 97.5 in April, above the 96 analysts expected.
The Dow Jones industrial average fell 75.07, or 0.71 percent, to close at 10,467.48.
Advancing issues just outnumbered declining ones on the New York Stock Exchange, where preliminary consolidated volume came to 1.92 billion shares, compared with 1.38 billion traded on Friday. U.S. financial markets were closed Monday for Memorial Day.
Despite the day's lackluster trading, all of the major indexes advanced for the month, making up for nearly all the ground lost during the slump in April. The Dow rose 274.97, or 2.7 percent; the S&P added 34.65, or 3 percent, and the Nasdaq advanced 146.57, or 7.63 percent.
Investors were disappointed when the Purchasing Management Association of Chicago reported that its index of business activity in the Midwest area fell to 54.1 in May from 65.6 in April. In April, the index had fallen from 69.2 in March. A reading above 50 indicates expansion in the manufacturing sector, while a number below 50 indicates contraction.
