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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (68)	7/5/2000 3:16:31 PM
From: Math Junkie	Read Replies (1) \| Respond to of 10065

It certainly does not bode well for the response of the market as a whole in the event that earnings growth falls.

To: Justa Werkenstiff who wrote (68)	7/5/2000 4:47:09 PM
From: Justa Werkenstiff	Read Replies (1) \| Respond to of 10065

Leading Indicators Decline in May By LISA SINGHANIA .c The Associated Press NEW YORK (AP) - An important measure of future economic activity fell slightly in May, the latest indication that a succession of interest-rate hikes has slowed the U.S. economy. The Index of Leading Economic Indicators declined by 0.1 percent, primarily because of a pullback in manufacturing and a decline in stock prices, the Conference Board said Wednesday. The index held steady in April, according to revised figures, after increasing by 0.1 percent in March. The index, which attempts to forecast economic trends for the next three to six months, stands at 106. It stood at 100 in 1996, its base year. ``The bottom line is that the economy is still growing. It's not as fast as it was, but it's still growing,'' said Ken Goldstein, an economist for the private industry group. The stock market, which opened lower Wednesday in response to a couple of earnings warnings by technology companies, seemed little affected by the report. In afternoon trading on Wall Street, the blue-chip Dow average was down 25 points to 10,534 and the Nasdaq composite index was down 98 at 3,893. The report, which was slightly above analysts' expectations, was the latest in a series of economic data to suggest that the economy, while still growing, is slowing down. ``Primarily, it's further confirmation that the economy is moderating,'' said David Orr, chief economist at First Union Corp. ``The brakes are being tapped.'' Concerns about too-rapid expansion and fears of inflation have prompted the Fed to raise interest rates six times in the past year. The central bank left rates unchanged at its most recent meeting last week, but left the door open to the possibility of another rate hike at its next meeting on Aug. 22. Employment figures are due out Friday, and economists say those numbers, along with inflation indexes, could shed light on what the Fed's next move may be. ``At this point it's not really a question of: if the economy is slowing down. We've seen enough that indeed it is happening,'' said Kathleen Stephansen, senior economist at Donaldson, Lufkin & Jenrette Securities Corp. ``The question is whether the Fed has achieved a balance between price stability and sustaining growth. ... If the Fed is not completely comfortable, it could raise rates.'' Goldstein said that key economic indicators during the past two years have dropped during the spring, only to rebound during the summer. ``We've seen an economic slowing in spring of 2000, it would not surprise me at all to see something of ... a snapback in the summer,'' he said. ``If that's the case, I think there will be a rate increase.'' The economy is still exhibiting some strength, according to Wednesday's report. The Index of Coincident Indicators, which gauges current economic activity, rose 0.2 percent in May, boosted by strength in industrial production and personal income. The Index of Lagging Indicators also rose, climbing by 0.2 percent. That gain was fueled by increases in outstanding commercial and industrial loans, prime rates and changes in labor costs. The three indexes are used together as a barometer of overall economic trends. The leading indicators index attempts to forecast the short-term economic outlook, the coincident index assesses current economic activity and the lagging index reflects changes that have already occurred.