The Clinton Herald
---- — NEW YORK (AP) — The stock market continued its sluggish start to the month on Wednesday.
Stocks fell as investors weighed conflicting economic reports and assessed the outlook for the Federal Reserve’s economic stimulus program.
The market was lower in early trading after a payroll company reported that U.S. businesses added the most jobs in a year last month as manufacturing and construction expanded. Investors worried that this latest sign of economic expansion could mean that the Fed will pull back on its stimulus sooner than previously expected.
Indexes reversed course in mid-morning trading after another survey showed weakness in the U.S. service sector last month. The Institute for Supply Management said its service-sector index fell to the lowest level since June, indicating that cautious spending by consumers and businesses may be slowing growth.
By midday stocks began sliding again and the Standard & Poor’s 500 index closed lower for the fourth straight day, its longest losing streak in more than two months.
The latest bout of investor anxiety about the Fed’s plans for its stimulus program comes ahead of the government’s closely watched monthly employment report due out on Friday. The Fed’s $85 billion in monthly bond purchases have been supporting financial markets and giving investors an incentive to buy stocks by making bonds seem relatively expensive. The Fed’s program is aimed at supporting the economy by keeping long-term interest rates very low to encourage borrowing and hiring.
After surging this year, stocks have had a slow start to December, statistically one of the strongest months for the market. The S&P 500 index has dropped 0.7 percent so far, paring its annual gain to 25.7 percent.