Market News and Analysis: August 1, 2012
The Federal Reserve admitted that the economy has “decelerated somewhat” but declined to offer further monetary stimulus. The Fed recently continued Operation Twist, the bond buying program used to keep interest rates low. With the run of poor economic data (slowing GDP and manufacturing for example), some analysts and stock traders had anticipated some kind of action.
Manufacturing activity contracted for the first time since April 2009 according to the Institute for Supply Management. The ISM’s composite index had a reading of 49.8 percent for June. Any score below 50 indicates.
Purchase applications declined for the third straight week according to the Mortgage Bankers Association. Purchases fell 2.0 percent, but refinance activity grew 0.8 percent. The purchase market might be effected by a lack of supply on the market.