U.S. stocks and exchange trade funds (ETFs) opened the last day of the quarter in negative territory as discouraging manufacturing data fell far short of what economists had expected.
The Chicago Purchasing Managers Index, considered a precursor to the national Institute for Supply Chain Management Index, fell to 46.1 in September rather than rising to the 52 mark expected by economists.
Additionally, the Commerce Department said GDP, the broadest measure of the economy, sank at a pace of just 0.7% in the spring, beating analysts’ expectations of an annualized drop of 1.1%. Although GDP numbers are promising, the Chicago PMI data is fresher, and reminded investors that the economy still has major obstacles to overcome before a solid recovery can occur, state Ieva M. Augstums and Tim Paradis of the Associated Press.
In the real estate arena, U.S. mortgage applications fell despite attractive loan rates. The Mortgage Bankers Association said applications fell to a seasonally adjusted 2.8% in the week of Sept. 25, driven down by a 6.2% drop in demand for purchase loans and a 0.8% decline in refinancing requests. The data further suggest that a rebound in the housing sector will be a slow one. The iShares Dow Jones U.S. Real Estate (NYSEArca: IYR) was down 1.5% in morning trading.