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Services firms expand at slowest pace in 17 months - Road Runner

WASHINGTON — Service businesses such as restaurants, hotels and financial companies experienced their weakest growth in 17 months in July.

The report Wednesday from the Institute for Supply Management confirms other data that show the economy is struggling two years after the recession officially ended.

The trade group of purchasing executives said its index for services companies fell to 52.7, from 53.3 in June. Any reading above 50 indicates expansion.

A slumping service sector put Wall Street on track for another wild day of trading. The Dow Jones industrial average fell more than 150 points after the report was released. But a late-day rally erased all the earlier losses, and the Dow closed up 29 points to end an eight-day losing streak.

The ISM index covers 90 percent of the work force. It reached a five-year high of 59.7 in February, but has fallen since then. The July reading was the lowest since February 2010.

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by Christopher S. Rugaber
AP Economic Writer

link submitted by John Branin

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