By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Stocks pare losses after manufacturing report
Placeholder Image
NEW YORK — Wall Street pared its losses Monday after a better-than-expected reading on manufacturing eased some of the market’s anxiety about the economy.
    A widely-followed survey of manufacturing companies rose during January from a record low, but still fell for the 12th straight month as the recession spread around the world. The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index rose to 35.6 percent in January from a 28-year low of 32.4 in December. That was well above the reading of 32.6 economists had expected.
    Stocks traded mixed following the report. Earlier, Wall Street tumbled after the Commerce Department said personal spending fell for the sixth straight month in December by 1 percent. Analysts had predicted a decline of 0.9 percent. Incomes also dipped, and the personal savings rate shot higher, a sign that consumers remain extremely nervous about the economy.
    The Commerce Department also said construction spending dropped by 1.4 percent in December, slightly worse than the 1.2 percent decline economists expected.
    The major market indexes have fallen for four straight weeks on increasing pessimism about the economy, and the Dow Jones industrials and the Standard & Poor’s 500 had their worst January ever.
    In morning trading, the Dow fell 50.73, or 0.63 percent, to 7,950.13, after earlier falling as much as 121 points. The Standard & Poor’s 500 index fell 3.41, or 0.41 percent, to 822.47, and the Nasdaq composite index rose 9.62, or 0.65 percent, to 1,486.04.
    As the economy deteriorates and consumers hunker down, investors are once again looking to Washington for help. But the market has been growing worried about government gridlock over a stimulus package for individuals and businesses.
    The stimulus package that passed the House last week now goes to the Senate, where Republican leader Mitch McConnell said Sunday the bill backed by President Barack Obama and congressional Democrats could be defeated if it’s not stripped of what Republicans deem unnecessary spending.
    Investors are also concerned about the nation’s ailing banks. So far, no ‘‘bad bank’’ plan has emerged from the White House. Such a plan would allow the government to take the riskiest assets off of banks’ books and put them into a government-controlled entity.
Sign up for the Herald's free e-newsletter