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Stocks limp into the weekend
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(AP Photo/Kin Cheung)
Stocks struggled again this week and lost altitude on the final day of trading after an unexpectedly large decline in the University of Michigan's consumer sentiment survey added to worries about the economic backdrop.
The Dow Jones Industrials closed down 37 points to finish at 8,147, and the S&P 500 index lost 4 points to 879. The Nasdaq Composite managed to advance 3 points to 1,756.
Growing concerns about the economy continued to pressure crude oil prices, which ended the day below $60 per barrel for the first time since the middle of May. See Oil breaks through $60.
A study by the International Energy Agency indicated little likelihood of a pick up in demand this year, signaling that a continuation of soft economic activity may be the most likely scenario.
The worsening sentiment toward the economy also kept downward pressure on Treasury yields, with the benchmark 10-year yield losing 12 basis points to finish at 3.29%.
However, falling crude prices and lower yields on longer-term government securities will likely benefit consumers.
Prices at the pump should eventually reflect the weakness in oil, and mortgage rates, which are closely tied to the yield on the ten-year bond, have been in a downward trend. Lower costs to finance a home may entice some fence sitters and could reignite interest in mortgage refinancings.
In the meantime, I suspect we will see a bottom in economic activity sooner rather than later. Much of the forward-looking economic data are still pointing to a slow recovery. If jobless claims reverse the downward trend, that would send out a discouraging signal.
For more info: Please see my blog Tomorrow's Economy Today. The trade deficit narrows to nine-year low is also available.
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