U.S. stocks trade flat after FOMC Minutes

07:41, January 07, 2010      

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Wall Street ended flat on Wednesday after the Federal Reserve (Fed) signaled economic recovery is not strong enough to lift interest rates.

The recovery in economic activity was gaining momentum, but labor market remained a major concern, according to the latest minutes of the Federal Open Market Committee (FOMC) meeting, which was held on Dec. 15-16.

The Fed said that industrial production sustained the broad-based expansion that began in the third quarter, while the pace of job losses slowed noticeably in recent months.

However, "the weakness in labor markets continued to be an important concern to meeting participants, who generally expected unemployment to remain elevated for quite some time," the minutes showed.

Also on Wednesday, the Institute for Supply Management said its December index of service-industry activity rose to 50.1 percent from 48.7 percent in November.

Although the gain was not as robust as expected, investors were still thrilled to see it come back to growth territory. Readings above 50 percent indicate that activity at more firms is expanding rather than contracting.

A report from Automatic Data Processing (ADP) said that private sector employment decreased by 84,000 jobs in December, down from a revised 145,000 in November but more than analysts' anticipation.

The ADP report weighed on the market as investors viewed it as a precursor to the Labor Department's monthly Employment Situation Report, which is due on Friday.

The Dow Jones gained 1.66, or 0.02 percent, to 10,573.68. The Standard & Poor's 500 index added 0.62, or 0.05 percent, to 1,138.05 and the Nasdaq fell 7.62, or 0.33 percent, to 2,310.89.

Source: Xinhua
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