Marc Pado Comments: Wall Street Slips on Goods Orders Data
August 25, 2010, The Sydney Morning Herald
Wall Street shares opened with losses on Wednesday after weak data on goods orders stoked concerns that the US economy was heading downwards.
The Dow Jones Industrial Average fell 30.04 points (0.30 per cent) to 10,010.41 in opening trade while the broader S&P 500 index dropped 4.40 points (0.42 per cent) to 1,047.47, both extending a fifth session in the red.
The tech-rich Nasdaq composite index slipped 10.76 points (0.51 per cent) to 2,113.03.
"Durable goods was a very poor number, but still we're living off some of the pains from yesterday," said Marc Pado, a market analyst at Cantor Fitzgerald.
US stocks slumped on Tuesday after an industry report showed a massive drop in US existing home sales in July from a month earlier, briefly pulling the Dow index below the psychologically sensitive 10,000 point threshold.
"We are going to a bottom of a bigger range in the market based on the fact the we face a double-dip" recession, Pado said.
The Commerce Department reported shortly before trade opened a slight 0.3 rise in orders for manufactured durable goods -- items such as planes, cars, refrigerators and computers.
But most economists had expected orders to rebound by a stronger 3.0 per cent.
The small July rise was on the back of transportation equipment, mostly non-defence aircraft and parts. Excluding transportation, new orders decreased 3.8 per cent.
The government is expected on Friday to significantly revise downward gross domestic product (GDP) growth chalked up in the second quarter to 1.4 per cent from 2.4 per cent previously, according to most analysts.
"What looms large is the big downwards revision in GDP, the market will have a tough time doing much until they get passed that number... But we are oversold here, I think the market has taken the worst of the news," Pado said.
