Dow Falls for the Third Day in a Row

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Members of the Federal Reserve are out talking with the public today, and their comments are sending the Dow Jones Industrial Average (DJINDICES: ^DJI  ) lower. As of 1:15 p.m. EDT the Dow is down 36 points to 15,415. The S&P 500 (SNPINDEX: ^GSPC  ) is down seven points to 1,702.

On Friday, comments by Federal Reserve Bank of St. Louis President James Bullard sent the Dow lower. Bullard suggested that the Fed could begin to pare back its quantitative-easing program at the Federal Open Market Committee's meeting at the end of October. Today, three other Fed presidents are speaking to the public.

Federal Reserve Bank of New York President William Dudley spoke at Fordham Business School this morning, saying, "The economy still needs the support of a very accommodative monetary policy." He went on, "Improving economic fundamentals versus fiscal drag are pulling the economy in opposite directions, roughly canceling each other." Ben Bernanke had said that the Fed could begin tapering if economic conditions improve. Dudley is of the opinion that the economy is not strong enough yet to begin tapering and voted last week to maintain the current $85 billion-per-month asset purchases.

Also speaking today was Federal Reserve Bank of Atlanta President Dennis Lockhart, a nonvoting member of the FOMC, who spoke on economic dynamism in the U.S. Economic dynamism has slowed in recent years along with job reallocation, productivity growth, and new business formation. While the Federal Reserve can help through monetary policy, the biggest changes will only come when the government removes obstacles to growth and entrepreneurship. Lastly, Federal Reserve Bank of Dallas President Richard Fisher is speaking in San Antonio today at 1:30 p.m. EDT.

There was one U.S. economic release today.

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Markit Manufacturing PMI

September

52.8

53.9

Markit's flash Purchasing Managers' Index for September dropped by 0.3 points to 52.8, whereas analysts had expected a rise to 53.9. The level of the PMI indicates that manufacturing activity expanded but at a slower rate than last month. The new-orders index experienced a 3-percentage-point drop, and employment expectations also dropped, pulling the PMI down.

New stocks on the block
Two out of the three new Dow stocks are down for the day, with new Goldman Sachs (NYSE: GS  ) leading the index's fall, down 2.2%. Goldman Sachs is down after an analyst forecast a drop in fixed-income trading revenue. Competitor Jefferies Group, now a subsidiary of Leucadia National, reported a large drop in bond-trading revenue last week, while over the weekend the Financial Times reported that Citigroup expects also to report a large drop in trading revenue.

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