Stocks fell Wednesday after a report on the nation's service economy came in largely as expected, offering few reasons for investors to rally on hopes for an interest rate cut. The Institute for Supply Management report showed a slowdown in the sector but not one outside Wall Street's expectations. The ISM's non-manufacturing index fell to 54.8 from 55.8 in August as expected.
A weak reading could have ignited investor enthusiasm for another rate cut by the Federal Reserve, which lowered its key lending rate last month by a half percentage point. Many investors expect the central bank to trim rates further this year, but there is debate over whether another reduction might come at the Fed meeting Oct. 30-31 or in December.
I predict the reduction will not happen in October, despite those who speculate it will happen in October.
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