Sept. 6 (Bloomberg) -- U.S. stocks trimmed losses after a gauge of service industries showed faster-than-forecast growth, tempering concern the economy is headed into a recession.
The Standard & Poor’s 500 Index lost 1.9 percent to 1,151.29 at 10:02 a.m. in New York after plunging as much as 2.7 percent earlier.
The Institute for Supply Management’s index of non- manufacturing businesses increased to 53.3 in August from 52.7 a month earlier. A reading above 50 signals expansion and the median estimate in a Bloomberg News survey of economists called for a reading of 51.
The U.S. stock market was closed yesterday for the Labor Day holiday, as global equities fell, Italian bonds dropped for an 11th day and the cost of government and bank default insurance rose to records amid concern about Europe’s debt crisis.
The S&P 500 plunged 2.5 percent on Sept. 2, wiping out a weekly advance, as a government report showing employment growth stagnated stoked concern the economy may fall into a recession. The index slid as much as 18 percent from a three-year high on April 29 and sank 5.7 percent in August, the biggest monthly drop since May 2010. Stocks trimmed losses at the end of last month as Federal Reserve Chairman Ben S. Bernanke said on Aug. 26 that the central bank has tools to stimulate growth.
Financial shares sank 1.9 percent last week as the Federal Housing Finance Agency sued lenders over residential mortgage- backed securities. The S&P 500 Financials Index is down 22 percent this year through the end of last week.
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