For Teachers: Lessons on the Service Sector

The Stock Market Game Week in Review: Feb. 4-8

It was a super week for New York football (the New York Giants won the Super Bowl) and New York democracy (the New York state presidential primary during Super Tuesday), but for stocks, not so much.

On Tuesday, Feb. 5, here in New York, 2 million of our closest friends joined us in the Canyon of Heroes (lower Broadway) to hail the most unlikely of heroes (the Giants who beat the seemingly "perfect" New England Patriots). But over at the corner of Wall and Broad, a wave of fear washed over the New York Stock Exchange trading floor as the Dow lost 300 points. The Nasdaq and S&P didn't fare any better.

What had traders so frantic was the jaw-dropping fall in the Institute for Supply Management's nonmanufacturing survey (see "Weak Data Send Stocks Reeling"). The survey is sent to service sector business managers across the country. The service sector represents 70% of our economy. The ISM's non-manufacturing survey asks purchasing managers how many orders they think they will place in the next month. Thus, the survey is thought to be a predictor of business activity in the economy and it recorded the worst month-to-month loss since its inception in 1998 and the worst reading since Sept. 11, 2001. So what does this mean? ...