Obamanomics Leads to Falling Manufacturing, Construction Stocks
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NEW YORK ? Stocks are falling on Wall Street following reports that construction spending and manufacturing have weakened in the U.S., further fueling reports and polls that the economy is underperforming under Pres. Barack Obama.
The Dow Jones industrial average was down 100 points at 12,991 at midday Tuesday. The broader S&P 500 index fell eight points to 1,398 and the Nasdaq composite fell 20 points to 3,047. The U.S. stock market was closed Monday for Labor Day.?Industrial and materials stocks fell the most. Heavy equipment maker Caterpillar was the weakest stock in the Dow average, slipping 3 percent, or $2.58, to $82.75.
The Commerce Department reported that U.S. construction spending fell 0.9 percent in July from June, driven lower by a sharp drop on spending on home improvement projects. The previous three months saw an improvement in new home construction, but this month it fell 5.5 percent.
The report affected home improvement store stocks such as The Home Depot and Lowe?s, which fell 11 cents and 21 cents respectively.
A separate report delivered more gloomy news on the economy: the third straight month of contraction in U.S. manufacturing. New orders, production and employment all fell in August. Factories have been a key source of jobs and growth since the recession ended in June 2009, but the sector been weak in recent months.
The Institute for Supply Management, a trade group of purchasing managers, says its index of manufacturing edged down to 49.6 from 49.7 in July, and the lowest reading in three years. A reading below 50 indicates that manufacturing is contracting.
?It?s time to go back to school and sharpen up on stocks and pay attention to the numbers,? said Kim Forrest, equity analyst at Fort Pitt Capital Group. ?The numbers show that there?s a lot of weakness out there and investors have gotten lulled into complacency in the last month or so.?
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Source: http://www.aim.org/newswire/obamanomics-leads-to-falling-manufacturing-construction-stocks/
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