Stocks weaker on Chicago PMI, which came in at 46.1, well below expectations of 52 (anything above 50 shows expansion).
Why did the market move on this news?
This is not normally a market mover, however, it is one of the first snapshots of the month and is usually released one day before the more important national ISM.
Manufacturing is still a very important part of GDP, so traders are concerned that this weaker Chicago number may indicate that the September ISM number tomorrow may also be weaker than expected. The ISM is a survey of purchasing managers.
The ISM has been trending strongly upward for months now; we are expecting a reading of 54, up from the prior month of 52.9.
Even before this morning's market weakness, some key sectors have shown signs of topping out. For example, since the September 16th yearly high for the S&P 500, that index is down 2 percent, but the Dow Jones Transportation Index is down 6 percent, while home builders are down 11 percent.
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