The Dow Is Down Because Manufacturing Data Is Too Good

Released this morning, the Philadelphia Fed Index for July added another stronger-than-expected datapoint to the roster of recent economic releases. But because good news has become bad news in this market, stocks are falling Thursday morning. The S&P 500 is down 0.3%, while the Dow Jones Industrial Average and Nasdaq Composite have each slipped about 0.5%. The Philly Fed’s monthly survey measures trends in business activity and future expectations for the manufacturing economy of the Third Federal Reserve District of the United States, which includes Eastern Pennsylvania, Southern New Jersey, and Delaware. Formally known as the Manufacturing Business Outlook Survey, the questionnaire asks manufacturers about changes in their employment, prices, orders, inventory levels, and hours worked. Many data-watchers use the survey’s results as a window into the health of a large part of the broader national economy.