Financial markets uneasily awaited a Senate vote on the government's banking-sector bailout Wednesday, with stock prices fluctuating and...
NEW YORK — Financial markets uneasily awaited a Senate vote on the government’s banking-sector bailout Wednesday, with stock prices fluctuating and credit markets still extremely tight.
The Dow Jones industrial average closed down 19.59 at 10,831.07, after sliding more than 200 points in early trading.
Microsoft, one of the 30 Dow stocks, slipped 21 cents to close at $26.48 a share. Boeing, also a Dow stock, fell 73 cents to $56.62.
Broader stock indicators were narrowly lower. The Standard & Poor’s 500 index fell 5.30 to 1,161.06, and the Nasdaq composite index fell 22.48 to 2,069.40.
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After stocks suffered a steep drop Monday and rebounded partway Tuesday, investors were reluctant to make major moves before a Senate vote late Wednesday on a revised version of the plan defeated by the House. A disappointing economic report also weighed on the market. In its assessment of the manufacturing sector in September, the Institute for Supply Management revealed a troubling drop in new orders. The group’s overall index of manufacturing activity fell to 43.5 in September from 49.9 in August. Wall Street had expected a reading of 49.5, according to a poll of economists.
“We’re now seeing in those numbers that we’re getting a contraction in economic activity,” said Jim Dunigan, of PNC Wealth Management.
At this point in the credit crisis, weak economic numbers are coming as no surprise to Wall Street — but September’s numbers are expected to be particularly bleak because of the seizing up of the credit markets that occurred during the month. The reports are further reminders of how much pain is being felt in the economy, and the data are likely to motivate more investors to pull money out of stocks.
The greatest concern on the Street remains the stagnant credit markets.
“We’ve taken the credit markets for granted much like you do the electricity coming on every day, but in this particular case the power grid is down,” said Dunigan. “If we don’t have a functioning credit market banks aren’t lending to each other — credit is dried up. That ultimately affects economic activity.”