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Another Slow Day on Wall Street - 2001-08-09

Trading volume remained low throughout the day Thursday following more bad news in the retail sector. Companies involved in stem-cell research were among the few performing well.

The markets closed the day mixed. The Dow Jones Industrial Average finished up by point 5 percent at 10,298. The technology driven Nasdaq closed at 1,963, shedding just 3 points. The broader S&P 500 index ended with a loss of just 0.1 percent at 1,183.

One of the reasons the markets were unable to gain more traction is the continuing poor performance in the retail sector. For example, The Gap, the nation's largest retail clothing chain, announced substantial job layoffs as it tries to offset poor sales. However, the industry does hold out hope that with the back-to-school rush getting underway the president's tax rebate may spark sales for the second half of the year. The Gap, Abercrombie and Fitch, and the Limited were among the well-known retailers performing poorly on the day.

One sector trading well involved those companies developing stem-cell research. Geron, Stemcells Inc., and Aastrom Biosciences were among those seeing share price rises. The reason is many traders are presuming President Bush will allocate at least some federal funding for stem-cell research.

One positive sign for consumer spending is the latest jobless figures. Over the last week, new jobless claims rose, but not as high as predicted. This has a critical effect on Wall Street trading as consumer spending accounts for roughly two-thirds of the U.S. economy.

There is a growing expectation on the trading room floors that the Federal Reserve will loosen interest rates over the next month or two. A pessimistic report by the Fed on the state of the nation's retail sales has made a cut more likely. But traders note the previous cuts haven't yet had a dramatic affect on the markets, and therefore any subsequent cuts won't likely be felt until late this year at the earliest.