It has been another quiet day on Wall Street. Retail sales figures helped boost the markets in early trading, but that momentum could not be maintained over the course of the day.
At the close of trading each of the key indices finished the day with a loss.
The Dow Jones Industrial Average closed down by three points to end at 10,412. The Nasdaq shed just under one percent of value to 19.64. The S&P lost four points to close at 11.87.
The latest available retail sales figures are better than expected - a sign that even in the midst of a slow economy, consumers are still spending money. Sales rose by 0.2 percent when they were expected to be down slightly. Now, once President Bush's tax rebate is factored in, analysts expect those numbers to rise over the next two months.
Increasingly, Wall Street traders anticipate another interest rate cut to come next week. That is the next time the U.S. Central Bank will meet to consider the state of the economy. With inflation under control, but the recovery not yet gaining traction, the central bank is likely to announce a cut of 25 basis points. That would mark the seventh cut in the year to date, and will place interest rates at their lowest levels since 1994.
Despite the narrow trading range on the day, Larry Wachtel, a market analyst at Prudential, says the light trading is largely due to the time of year. "I think it is seasonal," she said. I think August and September being the worst days of the market cycle. As you get into the fall, the better seasonalities kick in. I think that's definitely part of it. And I think we have to get more evidence of an economic quickening, some signs that the rate cuts and the tax cuts are beginning to kick in."
On the currency exchanges, the dollar is showing signs of weakness, a reflection of the state of the economy. Against the Euro, the dollar has fallen to its lowest levels in three months. And while it is still performing well against the yen, that is largely due to the state of the Japanese economy. Should the U.S. Central Bank go ahead with the expected interest rate cut, that should help the dollar. However the European Central Bank may loosen its hold on the Euro and cancel out any change.