Investors defensive with US data in spotlight

NEW YORK: With Wall Street limping along through the summer doldrums, investors say they will remain on guard for more deterioration in what's expected to be a light-volume week.

The S&P 500 suffered losses this week and is in danger of falling through support due to continuing worries about economic data.

"The market is moving into a defensive posture coming into next week," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"There may be some trepidation on the data that is coming out based on the data we saw this week that seems to indicate the economy could be deteriorating."

Even a pick-up in mergers and acquisitions was not enough to entice investors to get back into the market because of the dismal signs.

Potash Corp searched for a white knight on Friday as BHP Billiton formally launched its $39 billion hostile offer for the world's largest fertilizer company.

The offer came on the heels of Thursday's deal by Intel Corp to acquire software maker McAfee Inc for $7.7 billion, fueling speculation more acquisition activity was on the horizon, which market participants noted may not improve the economic climate.

"The main goal of a merger is to cut costs which means they are going to be cutting jobs even more -- so is that necessarily a good thing?" said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

courtsey:http://economictimes.indiatimes.com