Dow Jones' Economic Sentiment Indicator drops in February

Dow Jones' Economic Sentiment Indicator drops in February

2011-03-01 06:57:55 GMT+7 (ICT)

NEW YORK (BNO NEWS) -- Dow Jones on Monday released its latest Economic Sentiment Indicator (ESI) report, showing it dropped from 46.9 in January to 46.5 in February, almost a half of a point, after two consecutive months of strong gains.

As political unrest in the U.S. and abroad set back the economic recovery, the price of crude oil passed $100 a barrel for the first time in two years and concerns about the impact on consumers and businesses began to sink the ESI, which is determined by in-depth analysis of national news coverage across 15 daily newspapers.

Other news that aided in the ESI's decline was grassroots reporting covering budget cuts and criticizing spending by local governments in Chicago, New York and Michigan.

"The ESI continued to tread water in February, broadly maintaining levels of the previous two months," said Dow Jones Newswires "Money Talks" columnist Alen Mattich. "This suggests that although the recovery is embedded, it is still muted.

"There has been some erosion of sentiment during the past week as a result of the jump in oil prices triggered by the upheavals in North Africa," Mattich added.

Positive news around corporate earnings which kept the stock market climbing through most of February mitigated negative coverage and the ESI's fall.

Many retailers, including Target, Kohl's and Sears Holdings, had positive fourth-quarter results for shareholders. Reports of higher retail sales in January also added to the ESI's strength.

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