Trade Group Tracks Pullback

A key measure of the performance of stores,banks,contractors and travel firms-the service sector-was sharply down for January.The Institute for Supply Management's non-manufacturing index registered a 44.6-well below the 50 that indicates growth.The index characterizes most of the U.S. economy,which is service-oriented.It averages 57.6,which is 13 points higher than January's reading,and had been projected to be at 53.The ISM,a buyers' trade group in Tempe,Arizona,produces some of the most respected monthly gauges of economic activity.The ISM's reading of service sector business activity dropped to 41.9 in January from 54.4 in December,which was a decline of historic proportions.It was the first time the service sector contracted since March 2003.The results of this purchasing managers survey were even worse than during the last recession of 2001-2002.Then,the index had a reading of 50 at the start of the recession,and moved between 48 and 49 during the downturn.New orders for January 2008 dropped to 43.5 and employment slumped to 43.9.The G-7 finance ministers and central bankers,who met over the weekend,said the U.S. economy may decline further,hindering global growth."Downside risks still persist,"the officials said in their statement.The G-7 consists of the U.S.,Canada,the U.K.,Italy,Germany,France and Japan.In their view,tighter credit conditions and continued volatility are to be expected.Jean-Claude Trichet,President of the European Central Bank,promised a firm response to a significant market correction,taking appropriate actions,individually and collectively,to secure stability and growth.Many investors remain active in these conditions,sticking to their habits of dollar-cost averaging and diversification to build for the medium and long terms.Health care stocks such as Apria Healthcare Group(AHG) and Johnson and Johnson(JNJ) are popular because they are seen as more recession-resistant.Other investors are staying in e-savings accounts such as that offered by Branch Banking and Trust(BBT),which yields 3.87%.