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In late trading, the 10-Year Treasury Note was up by 31/32, lowering its yield by 6 basis points to 2.92%; the Dow was down by 215.45 points to 8,376.24; and the Nasdaq was down by 46.82 points to 1,445.56.Today's economic news was mostly bad. The level of initial jobless claims fell last week but the level remains high and the latest level of continuing claims was the highest in almost twenty-six years. The report on factory orders for October showed the largest monthly contraction in over eight years. Orders were also down in all the key subcategories.News of large rate cuts by England and Sweden helped support stocks but the bad economic news and expectations of a weak employment report tomorrow put traders in a defensive mode late in the day. By the end of stock trading, the Dow had fallen by 2.51%, the S&P 500 by 2.93%, and the Nasdaq by 3.14%. This followed gains in the last two days that pushed the Dow up by 5.43%, the S&P 500 by 6.67%, and the Nasdaq by 6.75%. This in turn followed a huge decline on Monday that saw the Dow lose 7.70%; the S&P 500, 8.93%; and the Nasdaq, 8.95%Oil futures fell again today with the price of a barrel of light, sweet crude for next month delivery down by $3.12 on the New York Mercantile Exchange to close at $43.67. This was the lowest close for a front-month contract since January 5, 2005.The wild gyrations in the stock market and the growing string of bad economic news have drawn investment flows into the relative safety of government-backed securities (Treasuries). In the last seven trading sessions, the yield of the benchmark 10-Year Note has fallen by 77 basis points and is now at a record low.Tomorrow, the only economic release is the employment report for last month. In the report for October, the Labor Department said the seasonally adjusted level of nonfarm payrolls declined that month by 240,000. This was a larger decline than the 200,000 that forecasters had predicted. In addition, September's originally reported decline of 159,000 was revised to a drop of 284,000, the biggest decline since November of 2001. August's previously reported decline of 73,000 was revised to a drop of 127,000. The report indicated that job losses were broad-based; occurring across both the goods producing and services sector. Besides the larger than expected loss in payrolls, the report said that the unemployment rate -- the percentage of the active workforce without jobs -- jumped from 6.1% in September to 6.5% in October. This was the highest reading since March of 1994.November's payrolls are expected to have fallen by 300,000 or more. The unemployment rate is expected to have risen to 6.8%. 10:30 AM EST : Stocks are narrowly mixed in choppy trade while Treasuries are currently extending their winning streak. More stimulus measures by foreign banks are providing some support for both markets but more bad economic news is weighing against stocks.The positive news is that England and Sweden made large cuts to key lending rates today, lowering the interest rate environment and thus facilitating another cut by the Federal Reserve. In addition, France has announced a stimulus package with a value equivalent to $33 billion. In the economic news of the day, the Labor Department reported that the seasonally adjusted level of initial claims for state unemployment benefits fell last week by 21,000 to 509,000. This is a second weekly decline for a cumulative total of 34,000 but it follows two weeks of gains totaling 59,000. The latest move may also have been distorted by the adjustment that had to be made for last week's Thanksgiving holiday.In any case, readings over 400,000 are considered a sign that hiring is not keeping up with layoffs. Moreover, the four-week moving average, which smoothes out some short-term volatility, rose by 6,250 last week to 524,500, the highest reading since the week ending December 18, 1982. For the forty-eight weeks of the year to date, the average weekly claims reading has been 408,500. For the same period last year, the average was 319,521. The report said that the level of continuing claims rose by 89,000 to 4.087 million in the week of November 22 (continuing claims must be at least a week old). This was the highest reading since the week ending December 25, 1982. The four-week moving average rose by 63,750 to 4,001,750, the highest reading since the week of January 15, 1983. For the first forty-seven weeks of the year, the average continuing claims reading has been 3,222,979. For the same period last year, the average was 2,537,553.Yesterday, the employment report from Automatic Data Processing indicated a loss of 250,000 private (non-government) jobs in November. Another report on corporate layoff announcements from the outplacement firm of Challenger, Gray, and Christmas said that layoff numbers were up by 148.4% from a year earlier to the highest level in almost seven years. All of the recent indicators point to a weak employment report for last month. The report will be released tomorrow. Current predictions call for a loss in nonfarm payrolls of between 300,000 and 325,000. This would be the largest drop since October of 2001. The unemployment rate is expected to have risen to 6.8% from 6.5%. This rate would be the highest in fifteen years.Later this morning, the report on factory orders for October was released and it was more bearish than anticipated. In it, the Labor Department said that the seasonally adjusted level of orders fell by 5.1%, the largest drop since July of 2000. In addition, September's originally reported decline of 2.5% was revised to a drop of 3.1%.A large but volatile category is transportation. Orders there fell by 11.2% in October. But even excluding the category, orders were down by 4.2% following a 4.3% decline in September (originally reported as a drop of 3.7%). Observers are also interested in orders outside the defense sector since those within it are not governed by standard market forces. Defense orders fell by 25.9% following a jump of 26.3% in September. Ex-defense orders fell by 4.3% following a 4.0% decline in September. Ex-defense orders minus aircraft fell by 4.3% following a September drop of 4.6%.Another closely watched category is that of ex-defense capital goods minus aircraft. The trend in orders in this category is seen as a gauge of core business demand. The order level there fell by 5.0%, the largest decline since January of last year. September's originally reported decline of 1.5% was revised to a drop of 3.4%.Last week's report on durable goods orders said the level fell in October by 6.2%. This was revised in today's report to a decline of 6.9%, the largest in two years. The level of nondurable goods orders fell by 3.4% following a drop in September of 5.8%. September's decline was revised from 5.5% and it was the largest drop in two years . . . . LionMTS
Today's economic news was mostly bad. The level of initial jobless claims fell last week but the level remains high and the latest level of continuing claims was the highest in almost twenty-six years. The report on factory orders for October showed the largest monthly contraction in over eight years. Orders were also down in all the key subcategories.
News of large rate cuts by England and Sweden helped support stocks but the bad economic news and expectations of a weak employment report tomorrow put traders in a defensive mode late in the day. By the end of stock trading, the Dow had fallen by 2.51%, the S&P 500 by 2.93%, and the Nasdaq by 3.14%. This followed gains in the last two days that pushed the Dow up by 5.43%, the S&P 500 by 6.67%, and the Nasdaq by 6.75%. This in turn followed a huge decline on Monday that saw the Dow lose 7.70%; the S&P 500, 8.93%; and the Nasdaq, 8.95%
Oil futures fell again today with the price of a barrel of light, sweet crude for next month delivery down by $3.12 on the New York Mercantile Exchange to close at $43.67. This was the lowest close for a front-month contract since January 5, 2005.
The wild gyrations in the stock market and the growing string of bad economic news have drawn investment flows into the relative safety of government-backed securities (Treasuries). In the last seven trading sessions, the yield of the benchmark 10-Year Note has fallen by 77 basis points and is now at a record low.
Tomorrow, the only economic release is the employment report for last month. In the report for October, the Labor Department said the seasonally adjusted level of nonfarm payrolls declined that month by 240,000. This was a larger decline than the 200,000 that forecasters had predicted. In addition, September's originally reported decline of 159,000 was revised to a drop of 284,000, the biggest decline since November of 2001. August's previously reported decline of 73,000 was revised to a drop of 127,000.
The report indicated that job losses were broad-based; occurring across both the goods producing and services sector. Besides the larger than expected loss in payrolls, the report said that the unemployment rate -- the percentage of the active workforce without jobs -- jumped from 6.1% in September to 6.5% in October. This was the highest reading since March of 1994.
November's payrolls are expected to have fallen by 300,000 or more. The unemployment rate is expected to have risen to 6.8%.
10:30 AM EST : Stocks are narrowly mixed in choppy trade while Treasuries are currently extending their winning streak. More stimulus measures by foreign banks are providing some support for both markets but more bad economic news is weighing against stocks.
The positive news is that England and Sweden made large cuts to key lending rates today, lowering the interest rate environment and thus facilitating another cut by the Federal Reserve. In addition, France has announced a stimulus package with a value equivalent to $33 billion.
In the economic news of the day, the Labor Department reported that the seasonally adjusted level of initial claims for state unemployment benefits fell last week by 21,000 to 509,000. This is a second weekly decline for a cumulative total of 34,000 but it follows two weeks of gains totaling 59,000. The latest move may also have been distorted by the adjustment that had to be made for last week's Thanksgiving holiday.
In any case, readings over 400,000 are considered a sign that hiring is not keeping up with layoffs. Moreover, the four-week moving average, which smoothes out some short-term volatility, rose by 6,250 last week to 524,500, the highest reading since the week ending December 18, 1982. For the forty-eight weeks of the year to date, the average weekly claims reading has been 408,500. For the same period last year, the average was 319,521.
The report said that the level of continuing claims rose by 89,000 to 4.087 million in the week of November 22 (continuing claims must be at least a week old). This was the highest reading since the week ending December 25, 1982. The four-week moving average rose by 63,750 to 4,001,750, the highest reading since the week of January 15, 1983. For the first forty-seven weeks of the year, the average continuing claims reading has been 3,222,979. For the same period last year, the average was 2,537,553.
Yesterday, the employment report from Automatic Data Processing indicated a loss of 250,000 private (non-government) jobs in November. Another report on corporate layoff announcements from the outplacement firm of Challenger, Gray, and Christmas said that layoff numbers were up by 148.4% from a year earlier to the highest level in almost seven years.
All of the recent indicators point to a weak employment report for last month. The report will be released tomorrow. Current predictions call for a loss in nonfarm payrolls of between 300,000 and 325,000. This would be the largest drop since October of 2001. The unemployment rate is expected to have risen to 6.8% from 6.5%. This rate would be the highest in fifteen years.
Later this morning, the report on factory orders for October was released and it was more bearish than anticipated. In it, the Labor Department said that the seasonally adjusted level of orders fell by 5.1%, the largest drop since July of 2000. In addition, September's originally reported decline of 2.5% was revised to a drop of 3.1%.
A large but volatile category is transportation. Orders there fell by 11.2% in October. But even excluding the category, orders were down by 4.2% following a 4.3% decline in September (originally reported as a drop of 3.7%). Observers are also interested in orders outside the defense sector since those within it are not governed by standard market forces. Defense orders fell by 25.9% following a jump of 26.3% in September. Ex-defense orders fell by 4.3% following a 4.0% decline in September. Ex-defense orders minus aircraft fell by 4.3% following a September drop of 4.6%.
Another closely watched category is that of ex-defense capital goods minus aircraft. The trend in orders in this category is seen as a gauge of core business demand. The order level there fell by 5.0%, the largest decline since January of last year. September's originally reported decline of 1.5% was revised to a drop of 3.4%.
Last week's report on durable goods orders said the level fell in October by 6.2%. This was revised in today's report to a decline of 6.9%, the largest in two years. The level of nondurable goods orders fell by 3.4% following a drop in September of 5.8%. September's decline was revised from 5.5% and it was the largest drop in two years . . . .
LionMTS
