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An early-morning rally in the U.S. stock market on news of a deal to raise the debt ceiling was short-lived.
The U.S. stock market today seesawed after a short-lived rally on news of a deal to raise the U.S. debt ceiling and avoid an unprecedented default. At one point the Dow Jones industrial average was up by as much as 139 points, Marketwatch reports. However, a weak manufacturing report wiped out early gains, and the Dow ended down 11 points, or 0.1%. It’s the market’s seventh straight day of losses.
The markets reacted negatively to a report released on Monday that showed the manufacturing sector barely grew in July. The Institute for Supply Management’s manufacturing index dropped to 50.9 in July -- much worse than the level of 54 that economists were expecting, and down from 55.3 in June, according to CNNMoney.
“Now that the debt-ceiling deal… has averted an imminent catastrophe, attention can return to the underlying state of the economy,” Nigel Gault, the IHS Global Insight chief United States economist told the New York Times. “The news there isn’t good.”
"We keep seeing data that shows the economy is getting worse," Kim Caughey Forrest, senior equity analyst at Fort Pitt Capital Group told CNN. "Earlier this year, we thought the economy would improve -- albeit gradually. But all the negative surprises are concerning investors."
European and Asian financial markets had jumped early Monday, the New York Times reports, setting the tone for the strong opening on Wall Street. Japan’s Nikkei 225 index rose 1.3 percent in overnight trading, while in Hong Kong the Hang Seng added 1 percent.
(More from GlobalPost: Asian stocks rise on news of US debt deal)
(More from GlobalPost: Global markets rally on news of U.S. debt deal)
However, the European markets could not sustain their upward momentum. The FTSE 100 in London dropped 0.70 percent to 5,774.43, the CAC 40 in Paris lost 2.31 percent to 3,588.05, and the DAX in Frankfurt experienced its biggest percentage drop since March to end at 6,953.98.