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Thursday, July 03, 2008
Services Sector Makes Surprising Decline in June
Associated Press
NEW YORK--The nation's services sector declined unexpectedly in June after two months of growth, as new orders fell sharply and oil prices took their toll on businesses.
The Institute for Supply Management said Thursday that the services sector reading fell to 48.2 in June from 51.7 in May. It missed economists' prediction of a reading of 51.0, according to the consensus estimate of Wall Street economists surveyed by Thomson Financial/IFR. A reading above 50 signals growth.
The sector had been growing modestly, while much of the rest of the economy stalled. June's decline in the sector, coupled with Thursday's employment report showing the sixth straight month of job losses, added to the recent streak of bad news about the economy.
Bruce Kane, a Smithtown, N.Y. home accessories manufacturers rep, said stores he sells to are afraid to place orders for Christmas. "Come September, with home heating oil prices, they don't know what the customer is going to do," he said.
The Dow Jones industrial average, which has declined more than 20 percent since its October highs, rose in morning trading, up 30.77 to 11,246.28. Broader indexes were slightly lower, with the Standard & Poor's 500 down 0.39 to 1,261.13 and the Nasdaq composite down 4.08 to 2,247.38.
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