Stocks first took a dip following news growth in the service sector slowed in April, according to the ISM non-manufacturing index. The report even overshadowed news that jobless claims fell more than expected , dropping 27,000 to a seasonally adjusted 365,000, according to the Labor Department, the biggest weekly decline in almost a year.
Investors will be closely watching the monthly jobs report for April, due Friday. The latest estimates from economists surveyed by Reuters call for a gain of 170,000 new positions, a gain from March's tepid gain of 120,000.
“While we don’t think the economy’s rolling over to a double-dip, we’ll see softness continue through the second quarter,” said Phil Orlando, Chief Equity Market Strategist at Federated Investors. “Then, we’ll start to see a roll-off of the issues that have created the softness—energy prices will come down and global economic issues in the emerging markets and Europe will start to reverse.”
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