Street turns cautious ahead of employment report
A period of relative calm on Wall Street ended Thursday as stocks tumbled in the final hour of trading on growing investor anxiety ahead of the government's November employment report.
The major indexes each slid more than 2.5 percent, including the Dow Jones industrial average, which dropped 216 points after rising in seven of the last eight sessions.
Investors are worried that Friday's employment report would show a further deterioration in the job market; employers have already cut 1.2 million jobs in the first 10 months of the year, leaving the unemployment rate at a 14-year high of 6.5 percent. Economists expect the Labor Department will report that the jobless rate rose to 6.8 percent in November and that companies cut another 320,000 jobs.
"It's all about jobs and right now the outlook is pretty downbeat," said Alan Skrainka, chief market strategist with Edward Jones in St. Louis.
Jeff Kleintop, chief market strategist at LPL Financial Services, said many institutional investors are bracing for the report to show the economy shed 400,000 jobs last month. He said a reading below that number could prompt relieved investors to snap up stocks but that anything worse could touch off further selling.
"The market has been very reactionary to the data points, particularly key economic indicators like the employment report," he said.
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Member Comments
Posted By: Tan Boon Tee @ 11/24/2008 10:57:46 PM
Comment: Citi gets a bailout, the fate of the Big 3 is more or less doomed (albeit apparently still on the balance).
Citi???s good fortune invigorates the stock market; Dow raises its index, pulling up global markets. But will this last?
The President-elect promises 2.5 million jobs in two years, good news except the number seems small. In two years, some 3 to 4 million first-time employment seekers will emerge, and millions more retrenched workers will compete for re-employment. So, will the problem be solved or promise fulfilled?
(Tan Boon Tee)
Posted By: AshamedofYou @ 11/22/2008 10:44:13 AM
Comment: The article writer forgot to mention in the headline the 1000 point drop a couple days before, he leaves the impression from the headline that the market is up this week, this is what one would call yellow journalism.
Posted By: newsrain @ 11/21/2008 7:45:01 PM
Comment: I think the nomination of Timothy Geithner is great choice, definitely an intelligent choice. I find rather appalling the many comments here blaming this on Obama. I'm not one to always defend Obama, but if you're going to make an argument, make sure you know the facts first. Obama is a president-elect, he has not take office, and so for him to make any financial policies at the moment is an infringement on our current president. The stock market itself is largely based on public sentiment, it goes up when people feel good, like the choice of Geithner today, and vice versa. This is not to say that the economy isn't in terrible shape, but there's a lot of rapid re-structuring and aid being done to get the finance system running again. When that starts going, businesses can get loans, they have more monetary assets, which leads to more job creation, which leads to the public having more money to spend as consumers. When that comes, the whole economy will hopefully start to get back on track. This will take time, so it's not like Bush or Obama or whoever can just snap their fingers, say the magic word, and suddenly everything will be all fine.