Stock Rally; Factory Orders for Durable Goods AND Services

Discussion in 'Trading' started by ByLoSellHi, Oct 4, 2006.


    More signs of slowing US economy

    US computer manufacturers
    Declining factory orders are signs of a slower economy

    Growth in the US services sector has slowed, a further sign that growth in the world's biggest economy is slowing.

    The non-manufacturing index from the Institute for Supply Management (ISM) fell to its lowest level since April 2003, albeit still indicating growth.

    The services sector covers everything from shops and restaurants to airlines and banks, and accounts for 80% of US economic activity.

    US growth has slowed to 2.6% a year, from 5.6% in the first quarter of 2006.

    News of the slackening-off in services came as the US government unveiled data for September factory orders which showed no change from the month before.

    The ISM's manufacturing index had earlier in the week indicated slowing growth in the manufacturing sector.

    With the housing market - a key driver for US consumer spending and manufacturing - in the doldrums, many economists believe the Federal Reserve could now choose to keep interest rates on hold.

    "This tells us what we already knew about the economy - at least the services side - that generally it is losing momentum as we move into the fourth quarter," said Hugh Johnson, chief investment officer with Johnson Ellington Advisors.

    Investors will be keenly watching to see what Federal Reserve Chairman Ben Bernanke will say later on Wednesday at the Economic Club of Washington.

    After consecutively raising interest rates 17 consecutive times, by one quarter of a percentage point to 5.25%, the Fed decided in August to keep rates steady.
  2. yeah but fed is done and will prolly cut soon; mkt was salivatin for rates to stop since 04; i mean, what u expect.