By Maxine Shapiro, KERA 90.1 Commentator
Dallas, TX – One day into the holiday trading season, and the stock market decided to wait before any real gift is given. Some negative economic news put a little uncertainty back in the mind of the investor. I'm Maxine Shapiro with KERA Marketplace Midday.
Boy, the news couldn't have been better yesterday morning as retailers across the country shouted out with glee. Black Friday, the day after Thanksgiving, lived up to its name. Sales were up from last year, black ink vs. red ink. But retailers are still complaining, and it's all the calendar's fault - there are six fewer shopping days this year. In fact, even if sales increase by 10% every day until Christmas, one research group says sales would be down for the year. But since we must accept what is given to us and time cannot be changed, investors saw the positive news as motivation to continue the almost seven week rally in the market.
But wait, the economy does not live by gifts alone. The ISM Manufacturing Index was released, and figure was worse then expected. The Institute for Supply Management compiles an index of national manufacturing conditions. Readings above 50% indicate an expanding factory sector; readings below 50, a contraction. The index was 49.2 - below the expected 51. Unable to ignore the significance of this figure, the stock market gave back all of its earlier gains and closed lower on the day.
I try not to watch the daily moves of the market, but the Dow is flirting with the very important 9,000 mark. In fact, before the market broke, the Dow was trading over 9,000. Technicians, the professionals that use charts to forecast the market, would have much preferred that we close above 9,000. It didn't.
And today's news has thrown a little more cold water into the face of the market. AOL Time Warner projects flat revenues for 2003; the housing market saw a little setback today as prices rose at a slower pace for the third quarter; and Merrill Lynch says equities are too speculative here. Aren't they always speculative?
For KERA Marketplace Midday, I'm Maxine Shapiro.