Markets and exchange traded funds (ETFs) take a dive as investors remain wary on the health of the overall economy, thanks to a gloomy report about private sector jobs.
The Institute for Supply Chain Management reported that business at service companies was weaker than expected in June. The index fell to 46.4 from 47, marking the tenth straight month of declines. The disappointing news offset a more upbeat report from the Commerce Department, which said factory orders rose in June for the fourth time in five months. The 0.4% increase came after a 1.1% increase in May. Economists had been expecting a decline of 1%.
Unemployment numbers continued to increase, but at a slower rate as the U.S. private sector shed 371,000 jobs in July. The number was higher than the 345,000 estimated by analysts, but much lower than the 463,000 drop in June.
In the earnings arena, conglomerate Procter & Gamble (PG) reported a quarterly decline in profits of 18% and expects more declines around the globe as consumers continue to keep a tight grip on their wallets. Despite revenue declines and a drop in demand, PG beat Wall Street’s expectations. The news sent the Consumers Staples Select SPDR (XLP) down nearly 1% in morning trading; PG is 15.6%.
In the automotive industry, the “cash for clunkers” program received a little extra push and extended the program an extra month.
Overall, the Dow Jones Industrial Average was down 0.8%, the S&P 500 gave up 0.8% and the Nasdaq dropped 1.2%.
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Kevin Grewal contributed to this article.