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US stocks dip as slowdown in service sector, European debt concerns weigh on market
NEW YORK (AP) ' A slowdown in the U.S. service sector gave investors another reason to sell stocks Wednesday.
The Institute for Supply Management reported that business growth slowed at U.S. service providers in June. Financial companies and health care providers reported the weakest results. The ISM report followed a broad sell-off in Europe and another interest rate hike in China.
The Standard & Poor's 500 index fell 2, or 0.2 percent, to 1,335 in morning trading. Other market indicators were mixed. The Dow Jones industrial average of 30 stocks edged up 8, or 0.1 percent, to 12,578. The technology-focused Nasdaq composite index fell 2, or 0.1 percent, to 2,823.
"There are concerns about what direction the global economy is going and that's putting downward pressure on stocks," said Dorsey Farr, a co-founder of Atlanta investment advisory French Wolf & Farr. Attractive stock prices in technology and pharmaceutical companies helped keep the market's declines in check, he said.
European stocks fell after Moody's downgraded Portugal's debt late Tuesday. That raised fresh concerns about the strength of the European financial system. The Euro Stoxx 50, an index of companies in countries that use the euro, fell nearly 1 percent.
China also raised a key interest rate for the third time this year in an attempt to curb inflation. Many U.S. companies have focused on the country as a source of profit growth and are hoping that interest rate hikes there will not lead to an economic slump.
Among U.S. companies, General Motors gained 1.5 percent after analysts upgraded the stock. Walgreen Co. rose 0.5 percent after the retailer said its June sales were higher than anticipated.
There are no major corporate earnings reports scheduled for this week.
Many investors are looking ahead to Friday's employment report. Economists expect that the unemployment rate was 9.1 percent in June, unchanged from the month before.