Employment is down and so is early stock trading ` 200+ points….

[CAwireman]

Stocks Pummeled on Weak Jobs Report

By TIM PARADIS,AP
Posted: 2007-09-07 11:05:07

“NEW YORK (Sept. 7) – Stocks plunged in early trading while bonds surged higher Friday after the government reported payrolls in August fell for the first time in four years rather than rising as had been expected. The Dow Jones industrial average fell nearly 140 points[ -214 points as of this Piggington post ].

http://money.aol.com/news/articles/_a/stocks-pummeled-on-weak-jobs-report/20070904071509990001

Investors were unpleasantly surprised by the Labor Department’s report that payrolls fell by 4,000 in August, the first decline since August 2003, while the unemployment rate held steady at 4.6 percent as expected.

Wall Street has been awaiting the report as it tries to determine how well the economy is holding up under the weight of a faltering housing market, a rise in mortgage defaults and tightening availability of credit. While the report is backward looking and not predictive, investors regard it as an important reading of the economy’s health. ”

Loss of a home as an ATM may be dragging us down in the employment sector? Drop in RE and construction jobs restricting spending at retail locations? Stock market continues to be fickle.

[CAwireman]

Oh yeah, Sears was down yesterday due to a large drop in appliance sales…

I don’t remember where the link was.

HiggyBaby

[Anonymous]

I love how this is such a shock to everyone. With all the reports of companies slashing jobs last month and all the mortgage lenders cutting or going out of business, it was almost inevitable imo.

[donaldduckmoore]

Here comes my question that really makes me scratch my head, there are only 4000 job lost nationwide, and I would see this a little fluctuation. Why would this be such a leading cause for the Dow to come down more than 200 points? The job lost only limits in the financial sectors. With all of the bad news about credit problem. Losing less than that would surprise me. I think the market is overly sensitive these days.

[HereWeGo]

Because the expectation was a gain of 110-130K jobs.

[CAwireman]

DDM,

I agree with you about the market being jittery.

Also –

“Making matters worse, the Labor Department revised the jobs figures for June and July, saying the economy added fewer jobs than had been reported.”

The Market is pouting that the Fed isn’t lowering interest rates in the face of a number of troubling financial and economic indicators. Hang in there Ben. Don’t cave in to irrational pressure, until you have to….

The Dollar –

“The dollar fell sharply following the report, as the likelihood of an interest rate cut appeared to increase. Dollar-based assets would earn less interest if the Fed were to cut rates. In addition, gold prices rose sharply because some investors would be expected to abandon a weakening dollar and move into gold if the central bank lowers rates.

“This is just the expected response,” said Pandl, referring to Wall Street’s reaction to the jobs report. “The markets are repricing for lower growth and expectations of Fed cuts.”

http://money.aol.com/marketnews/article

HiggyBaby

[CAwireman]

Here’s where it looks like the day ended up.

Dow down 249 Dows at 13,113
NASDAQ down 48.6
S&P Down 25

[cr]

“I love how this is such a shock to everyone.”

No kidding. Especially when you consider the only reason our economy hasn’t had that forbidden 9-letter R word is because the low rates that fueled the housing bubble in turn fueled our economy for the past 5 years.

[eyePod]

I don’t think it was a shock to “everyone”. I agree with a lot on this board about real estate, but really people the stock market is UP over the last year. Why are ONLY the down days reported here?

[cr]

To me the down days signify the coming end of a bull market. I think the large fluctuations we see are a clear sign of a very unstable market, largely a result of the housing bubble.

I’d rather see modest gains of 1% a month or so. This 1% a day stuff is crazy.

[LA_Renter]

“Why are ONLY the down days reported here?”

In many ways volatility in the stock market validates the housing bubble argument. People chime in on down days due to it validating their position. Actually most of the down days this year have been associated with housing and the mortgage crisis. I think there was a show on CNBC, something like Fast Money, where they characterize the bull/bear debate on the economy using Godzilla representing the global growth story and King Kong representing the credit problems. Godzilla ran the show through about July much to many bears disbelief, then came King Kong and he’s pissed. I have to admit i have been bearish on the stock market since early in the year and was flat wrong…..through July. When King Kong started slapping everybody around I felt shedenfrude, now I just want somebody to put him back in his cage but I am beginning to believe that nobody knows how.

[cr]

Well, fortunately for my 401k stocks are up about 1.4% today, apparently “in hopes of rate cut”…

I’d much rather it be on strong company earnings, a decrease in CPI/inflation, or even strong sales, but up 1.4% on hopes that the FED will lower rates? That’s a huge increase based mostly on the glass being half full. Didn’t lowering rates arguably get us into this mess? Don’t we need to encourage people to save money so they can one day actually afford a home, not spend more?

Has irrational exuberance been replaced by irrational optimism?

[cr]

Up again today on: “on Countrywide Financing”? With automakers?

Wait, let’s get this straight. CFC, who just laid off 12,000 more people, whose stock is at an all time low, and is being sued by employees over 401k, is making a deal to offer financing to GM, whose sales have recently been better, but been tapering off for years, is barely holding onto #1, as we enter into a recession where Toyota is expected negative sales as a result, and stocks are up more than 1%?

Riddled with ignorance, and irrational optimism, this comment sums up how bliss it must be:

“It appears that this credit crunch may not be as bad as some people thought,” said Charles Norton, principal and portfolio manager at GNICapital, crediting the Countrywide news with lifting overall investor sentiment.

As I type this the DOW is up 175pts.

You be the judge.

[LA_Renter]

The market is melting up today, looks like a short squeeze. Gold is still over $715, oil is still pushing 80 and will probably go on a run, the dollar index broke 80 and hasn’t looked back, commercial paper is for the most part still locked up. Here is a good article from on the credit crisis and how it may deepen

Why the credit crunch may deepen
With the $2 trillion commercial paper market locked up, it’s harder for banks to lend money.
By Grace Wong, CNNMoney.com staff writer
September 13 2007: 10:19 AM EDT

LONDON (CNNMoney.com) — Stock markets have regained some of their poise on rising hopes that the Federal Reserve will cut interest rates on Tuesday. But investors appear to be looking past one key warning sign: The $2 trillion market for commercial paper remains locked up – suggesting there could be more pain ahead for borrowers around the world.

http://money.cnn.com/2007/09/13/markets/credit_crunch/index.htm

Bottom line is we have a long way to go to get through this mess. The market will trade like a cat on a electrical wire for the rest of the year. IMO

[stockstradr]

tnks for posting that CNNMoney.com article, it also led me to this, equally good article:

http://money.cnn.com/magazines/fortune/fortune_archive/2007/09/17/100250262/index.htm?postversion=2007090509

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