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Wall Street waffles on murky economic outlook

Wall Street waffles on murky economic outlook

U.S. stocks finished mostly lower Friday with investors fretting over fears that recovery from the global recession remains distant.
The Dow Jones Industrial Average fell 36.65 points (0.45 percent) to 8,146.53 in a lackluster session, closing out a fourth consecutive weekly loss for blue chips.
The tech-heavy Nasdaq edged up 3.48 points (0.20 percent) to 1,756.03 while the broad Standard & Poor's 500 index shed 3.55 points (0.40 percent) to 879.13.
Ahead of the opening, the government said the U.S. trade deficit narrowed sharply in May to its lowest level in nearly a decade, led by a plunge in imported oil.
The deficit fell nearly 10 percent in May to a seasonally adjusted 26.0 billion dollars, the lowest level since November 1999.
The news appeared moderately positive for the U.S. economy but also reflected weak global trade flows.
"This was a good report as far as it relates to second-quarter growth," said Joel Naroff at Naroff Economic Advisors. "What is not nice to see is the continued weakness in domestic spending."
The economic outlook "has most folks confused," said Al Goldman at Wells Fargo Advisors.
"We believe the data suggests that the end of the recession is near - that's the good news for investors. However, the data also appears to indicate, as we have been saying for a month, that a strong economy is not just around the corner."
David Rosenberg, chief economist and strategist at Gluskin Sheff, warned that stock investors should not look for strong gains simply based on a forecast of an end to recession, arguing that a "sustainable expansion" is needed.
"If the lesson from the 2000-2002 cycle is any indication, calling for the recession to end is basically irrelevant," Rosenberg said.
"What matters is that the recession's end gives way to a vigorous expansion."


Updated : 2021-10-21 07:38 GMT+08:00