- The Washington Times - Thursday, August 6, 2009

NEW YORK | Stocks slipped Wednesday as investors shied from making big moves ahead of the government’s monthly reading on job losses and the unemployment rate, which comes out before the start of trading Friday.

The pullback, which took the Dow Jones Industrial Average down 39 points, followed a 34-point gain Tuesday that was a slowdown from the previous day’s triple-digit advance.

The big concern on Wall Street is layoffs, and whether companies trying to preserve their profits during the recession are continuing to slash jobs at a furious pace. Job cuts have to slow for the economy to have a solid recovery.

The caution in Wednesday’s trading followed a disappointing report on the service industry. The Institute for Supply Management (ISM) said its service index, a measure of the health of retail, financial services, transportation and health care companies, fell to 46.4 in July from 47 in June. It was the 10th straight monthly slide.

Still, there are plenty of signs of strength on Wall Street, and one is the fact that Wednesday’s very modest loss was the biggest point drop in the Dow since July 7. Investors have been looking for the market to pause after it started to shoot higher in mid-July. But stocks’ occasional dips have been mild because some investors who missed the rally are looking to buy when prices dip.

The ISM report gave investors an excuse to cash in gains after the furious buying of the past month. The Dow is still up 13.9 percent in just 18 days.

“The market has just had a pretty good advance and is looking for a reason for a pullback,” said Henry Herrmann, CEO of investment management firm Waddell & Reed.

The Dow fell 39.22, or 0.4 percent, to 9,280.97. The broader Standard & Poor’s 500 Index fell 2.93, or 0.3 percent, to 1,002.72, while the Nasdaq Composite Index fell 18.26, or 0.9 percent, to 1,993.05.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.75 percent from 3.69 percent late Tuesday.

The Russell 2000 index of smaller companies fell 4.75, or 0.8 percent, to 565.99.

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