Stocks begin lower as investors enter week cautiously

Stephen Bernard
Associated Press

NEW YORK — Stocks edged lower Monday as investors took a cautious approach to trading before the government’s latest report on the jobs market.

A new report showed personal spending credit higher last month, but it had little affect on trading, even though shoppers returning to stores would help the economy. Investor enthusiasm was not strong after the report because traders are skeptical spending will continue to grow long-term without significant increases in hiring.

The Dow Jones industrial average fell 20 points in early morning trading. Broader indexes also edged lower.

Employment data has become vital for traders recently because jobs growth is considered the best way the recovery can get back on track and grow consistently. Signs of a slowdown in growth has plagued the market for more than a month. Investors are unsure if companies will be able to keep up strong earnings growth if the recovery runs out of steam or falls back into recession. And consumers aren’t likely to spend more until there are clear and regular signs of hiring.

The Commerce Department said personal spending rose 0.4 percent in July, the biggest jump in four months. Economists polled by Thomson Reuters had forecast spending would rise 0.3 percent.

Personal income rose 0.2 percent, just below the 0.3 percent growth rate economists expected.

In early morning trading, the Dow fell 19.53, or 0.2 percent, to 10,131.12. The Standard & Poor’s 500 index fell 2.19, or 0.2 percent, to 1,062.40, while the Nasdaq composite index fell 5.77, or 0.3 percent, to 2,147.86.


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