The Dow Jones Industrial Average
A mixed bag of news
On the positive front, the productivity of U.S. workers climbed more than initially estimated in the second quarter. Figures released today by the U.S. Department of Labor revealed that the measure of employee output per hour climbed at a 2.2% annual rate. This follows a 0.5% decline in the first quarter and handily beats estimates for a 1.8% increase.
Shares in industrial companies like Alcoa
On the negative front, investors continue to digest two pieces of bad news from earlier in the week. The first concerns a report released yesterday from the Institute of Supply Management suggesting that manufacturing activity contracted in the month of August. As I noted yesterday, this marked the third consecutive month of declines and was the worst reading in more than three years.
The second piece of bad news came after the markets had closed yesterday, when economic bellwether Fedex cut its earnings forecast for the current quarter, citing "weakness in the global economy." Shares in the company -- as well as its competitor UPS -- tumbled in after-hours trading following the announcement, and both remain depressed by nearly 2% today.
In terms of Dow components, today's biggest loser is American Express
Complacency is your enemy
Don't let today's meandering of the Dow lull you into a state of complacency, as the remainder of the week is chock-full of potentially destabilizing events.
The European Central Bank meets tomorrow and is widely expected to announce a purportedly unlimited bond-buying program aimed at reclaiming control of the continent's sovereign bond yields. And on Friday, the Labor Department releases the much-anticipated jobs numbers for August. Early estimates suggest that employers added only 120,000 jobs, well below the amount needed to have a positive impact on the current 8.3% unemployment rate.
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