Instant View: Chicago PMI index 49.7 in September

NEW YORK (Reuters) - Business activity in the U.S. Midwest contracted this month for the first time since September 2009, as new orders sank, a report showed on Friday.

COMMENTS:

CHARLES LIEBERMAN, CHIEF INVESTMENT OFFICER, ADVISORS CAPITAL MANAGEMENT LLC, HASBROUCK HEIGHTS, NEW JERSEY.

"The PMI does tend to be broadly consistent with what's happening in the manufacturing sector and we've seen some weakness or a slowdown in manufacturing. It had been one of the stronger parts of the economy, and evidently it has slowed down consistent with a lot of data we've seen recently."

JACK DE GAN, CHIEF INVESTMENT OFFICER, HARBOR ADVISORY CORP, PORTSMOUTH, NEW HAMPSHIRE

"Its correlation to the national PMI is not all that high, but it is a little disconcerting when it comes on the back of a couple of weak employment reports. It is clear our economy has leveled off at 1.5 percent growth at best.

"The manufacturing sector is clearly slowing down in this country and that is even with a pretty strong auto sector."

"The U.S. economy has had some fits and starts this year ... but the driver of overall equity prices has been Europe and I think that is still the case."

VASSILI SEREBRIAKOV, SENIOR CURRENCY STRATEGIST, WELLS FARGO, NEW YORK

"Clearly, some areas of the economy are weakening and justifies the Federal Reserve's decision to undertake a third round of quantitative easing. We therefore see continued open-ended bond purchases from the Fed."

DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT

"Not a good report and look at that drop in new orders, the new orders minus inventories figure is -3.7 or weakest since May of last year. This puts ISM into a sub 50 area, 49 is the estimate.

"And the bond market is a tad firmer but really doing nothing."

JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK

"It is an overwhelmingly soft report and the first time it has fallen below break even since the recession ended. What is more concerning it what happened in new orders, which is the lifeblood of the production cycle. This confirms and solidifies the ISM reports and production slowdown in the near term. Chicago PMI is manufacturing and services and so it is more encompassing and therefore we have a broad based slowdown."

PAUL NOLTE, MANAGING DIRECTOR AT DEARBORN PARTNERS IN CHICAGO

"The PMI headline is obviously very poor; this is one of the few PMIs that had been above 50. It follows the trend of other regional PMIs and national manufacturing in disappointing. Manufacturing has generally been weakening. We had been seeing good data recently, but now we seem to be following the slowdown in China and Europe and we're seeing weakness."

MARKET REACTION

STOCKS: U.S. stocks add to losses <.n>.

BONDS: U.S. Treasury debt prices extended strong earlier gains

FOREX: The dollar gained versus the euro and extended its rise versus the yen .

(Americas Economics and Markets Desk; +1-646 223-6300)

Source: http://news.yahoo.com/instant-view-chicago-pmi-index-49-7-september-141435816--business.html

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