Stocks fall on service sector report

December 22, 2008 2:10:21 PM PST
Stocks fell sharply upon news of a surprisingly large contraction in the service sector. The Dow fell 370 points to 12,265, or 2.9 percent.

The S&P 500 lost 44 points to 1,336.

The Nasdaq composite index dropped 73 points to 2.309.

Declining issues led advancers by a 5-to-1 margin on the New York Stock Exchange.

NYSE volume was more than 4.1 billion shares. Nasdaq stock market volume was 2.4 billion shares.

The Institute for Supply Management released numbers this morning that showed weakness in the service sector economy, affecting the likes of restaurants, travel, banking, construction and retailing.

The ISM reported that its new composite index measuring the health of the sector came in at 44.6 in January. Any number below 50 indicates contraction. At the same time, the measure of non-manufacturing business activity fell to 41.9 from a revised reading of 54.4 in December.

Worries about the economy also led to declines in commodities prices. Near-month crude fell $1.61 to settle at $88.41 on the New York Mercantile Exchange.


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