US Report:Dow Jones: 9,712.28 (-29.92) S&P 500: 1,057.08 (-3.53) Nasdaq: 2,122.42 (-1.62)

US STOCKS fell yesterday after a surprising contraction in an index of midwest business activity, but buying of technology bellwethers like Cisco Systems at the end of a strong quarter limited losses.

The top drags in yesterday’s session were some of the quarter’s best performers, including industrials, materials and banks.

The Institute for Supply Management-Chicago’s business barometer unexpectedly fell to 46.1 in September, a level that indicates contraction in the regional economy.

“The Chicago PMI kind of scared people, given how much below expectations it was and that turned the market south,” said Owen Fitzpatrick, head of US Equity Group at Deutsche Bank Private Wealth Management in New York.

“In general, even though economic numbers in the last two or three weeks have been mixed just like today, I think we’re still headed toward an economic recovery.”

Typical of quarter-end action, trading was choppy and volume light. The Dow Jones industrial average slipped 29.92 points, or 0.31 per cent, to 9,712.28.

The Standard Poor’s 500 Index fell 3.53 points, or 0.33 per cent, to 1,057.08.

The Nasdaq Composite Index shed 1.62 points, or 0.08 per cent, to 2,122.42.

Even so, the Dow – up 15 per cent this quarter – marked its best quarterly performance since the fourth quarter of 1998, while the SP 500 notched its second straight quarterly advance of 15 per cent. The Nasdaq gained 15.7 per cent for the third quarter.

After a weak open, the indexes briefly turned positive by mid-afternoon, thanks to gains in the shares of such tech bellwethers as Cisco Systems and IBM.

Ciscoshares rose 1.03 per cent to $23.54 on Nasdaq, while IBMshares climbed 0.7 per cent to $119.61. The semi-conductor index gained 0.9 per cent.

“When you look across the 10 [SP 500’s industry] sectors, technology is one sector where there’s actually some topline growth,” said Mr Fitzpatrick.

But JPMorgandeclined 2.4 per cent to $43.82, putting the stock among the Dow's worst performers, along with Boeing, down almost 1 per cent at $54.15 and United Technologies, off 0.6 per cent at $60.93. – (Reuters)