Wall Street Wrap – ISM Down, Jobless Claims UP, Market Down
By Robert Perrego, at 4:54 pm on October 1st, 2009Yesterday the Chicago PMI showed the way lower to the market, but after an early drop the market recovered. Nonetheless, what happened is that it showed the market was susceptible to a drop from an economic number. This morning the 8:30 a.m. Jobless Claims report came in above expected at 551,000 jobs lost when 537,000 was expected. Even worse, the previous number was 530,000 and 551 is going in the wrong direction. We are supposed to be recovering from this recession, yes? Then, to bookend the bad jobs data with the bad Chicago PMI from yesterday, the ISM Manufacturing Index came in at 52.6 with 53.5 expected and 52.9 the prior number from August. Once again, heading in the wrong direction. So the market asked itself; “Hmmmm, what good economic news have we got this week?” It answered itself with a resounding “None”, and then sold off ALL DAY LONG.
The Dow lost 203.00 points (-2.09%, 9508.28) while the S&P got hit for 27.23 points (-2.57%, 1029.85) and the Nasdaq 100 was the biggest percentage loser on the day dropping 52.58 points (-3.05%, 1666.41). Ugly across the board.
The dollar strengthened contributing to the stock market’s woes as this stronger dollar caused commodity based stocks to drop. Dow Jones Industrial Average component Exxon Mobil Corp. (NYSE: XOM) lost $1.34 (-1.95%, $67.27) and looking at its daily chart, Exxon has just started the break down from the large symmetrical triangle it has formed over the past four months (as mentioned in my previous Wall Street Wrap dated 9/24).
All 30 Dow components were down today, with the biggest loser in percentage terms being JP Morgan Chase & Co. (NYSE: JPM) losing 5.59% (-$2.45, $41.37). The race to the bottom was won by the finance sector today dropping 4.13%, with energy in second at -3.45%. The ’strongest’ performing sector today was consumer non-cyclicals losing only 1.76%.
Surprisingly, even with a stronger dollar and weaker economic indicators, Nymex crude was up 21 cents today to $70.38 a barrel. New York Spot Gold lost the $1,000 plateau last seen trading at $998.90 an ounce down $8.80 (-0.87%, 4:14 p.m.)
Now for the really bad news; The S&P 500 today broke down through the uptrend line the market has had since the very bottom back in March. The wonderful uptrend we have been experiencing all spring and summer is now in jeopardy. The Nasdaq 100 broke down through its major uptrend line on the 25th and broke down through its secondary trend line today. The Dow broke down through its secondary trend line on the 25th and closed right on its major uptrend line today. To sum this all up, technically speaking, things are starting to look pretty grim for the Bulls. We get a bad employment number tomorrow and sell-off into the weekend and LOOK OUT BELOW!
Traders are most likely looking forward to the headline number of the week, the Employment Situation number expected out at 8:30 a.m. tomorrow. This is the big number as we get that percentage that sticks in every one’s head. Right now it is at 9.7%, but the estimate range for tomorrow is 9.6% to 9.9%. With all the other job numbers missing this week, I suspect we go up the 1 or 2 tenths.
I have an idea to keep this market from dropping – this week we have had the ADP employment number, the Jobless Claims number and now we get the Employment Situation number tomorrow – so how about we cancel a few of these and just see one number a week?
Leaving you on that cheery note – the numbers for tomorrow are a loss of 170,000 jobs and 9.8%.
