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Excerpt from our One Page Annotated Wall Street Journal Summary:

Philadelphia Fed Posts Sharp Drop In Output Gauge

Summary: Three macro data points: (1) The Philadelphia Fed published its index of business conditions in the Mid-Atlantic states, which is strongly correlated with industrial output, at noon yesterday. The results were surprisingly poor: the index fell to negative 0.4 in September (implying contraction) versus positive 18.5 in August. This is the first negative reading since April 2003 and below economists' expectations of 15. The DJIA immediately fell 50 points -- see the chart for the Diamonds ETF (NYSEARCA:DIA). (2) The Conference Board's index of leading indicators showed a decline of 0.2% in August, the same decline as July and the fifth decline in the last eight months. (3) The Labor Department reported that initial jobs claims rose a seasonally adjusted 7,000 to 318,000; the 4-week moving average was unchanged at 315,000. Full WSJ article >
Related links: The Philadelphia Fed's press release and data • The Conference Board's full press release in PDF • Wider context: Fed Pauses Again, Rate Cut on the Horizon?Wednesday's Fed Release: Where's The Analysis of the Economy?! • Trading: What a U.S. Recession Would Mean for Sectors, Foreign Stocks -- discusses potential impact on the iShares Materials ETF (NYSEARCA:IYM).

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Source: Recession 2007? Philadelphia Fed Index Turns Negative