Stocks are off to a weak start following disappointing report on New York manufacturing

Stocks fall after weak manufacturing report

NEW YORK — Stocks started off on a down note Wednesday as a rally that drove the market sharply higher in September appeared to run out of gas.

A poor reading on manufacturing activity in New York dampened the mood on the market. The Empire State Manufacturing Survey Index came in well below analysts’ forecasts for September, disappointing investors who had become accustomed to seeing steady increases in activity at U.S. factories.

Stocks tempered their losses after a separate report on manufacturing was slightly more encouraging. The Federal Reserve reported that industrial production rose modestly in August and the manufacturing sector grew for the 12th time in 14 months.

European markets were mainly lower, but stocks in Japan surged 2.3 percent after the country’s government stepped in to weaken the yen. The yen had been hitting 15-year highs against the dollar, which makes it harder for Japanese exporters to compete on global markets.

Stocks have been mainly rising in September after a sharp slump in August. Better news on the economy, particularly manufacturing, set off a rally early in the month that still has the Dow Jones industrial average up 5.1 percent for the month to date. September is historically a weak month for stocks.

In the first hour of trading, the Dow Jones industrial average slipped 0.34 points to 10,526.15.

The Standard & Poor’s 500 index fell 1.67, or 0.2 percent, to 1,119.43 and the Nasdaq composite index fell 4.65, or 0.2 percent, at 2,285.12.

Japan sold an undisclosed amount of yen to weaken its currency, which was threatening to endanger manufacturers like Toyota Motor Corp. and Sony Corp. export goods around the world. The dollar rose 2.7 percent against the yen in morning trading.

The move by Japan could be short-lived because the dollar has been weakening recently and could resume its slide. The dollar’s struggles over the past few days are due, in part, to speculation the Federal Reserve might step in to start buying more Treasurys and mortgage securities in an effort to provide a lift to the struggling U.S. economy.

Treasury prices edged higher. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.68 percent from 2.67 percent late Tuesday. Its yield is often used to help set interest rates on mortgages and other consumer loans.