Stocks stumble over gloomy unemployment data

Markets absorbed the unemployment news fairly well. Dow was down only 39, decliners over advancers 5-2 & NAZ dropped 10. Banks were a little weak after yesterday's big decline.

500 FINANCIALS INDEX

Value 191.87

Change 0.51

% Change 0.3%

MLPs fell again. The Alerian MLP Index was off 1½ to the 244s. The Dow Jones REIT Index was down 1+, nearing a 10% decline from its recent high. Junk bond funds were mixed to weak but demand was strong for Treasuries. The yield on the 10-year Treasury bond was flat at 3.20%, lowest level in over 4 months.

Alerian MLP Index --- 3 months




Dow Jones REIT Index --- 3 months





Oil fell below 70 again, buffeted by the talks with Iran about its nuclear program & today's unemployment data. Gold found buyers, taking it back over 1K.

CLX09.NYM

...Crude Oil Nov 09

...69.19

... 1.63 .......(2.3%)

GCV09.CMX

...Gold Oct 09

...1,006.50

... 7.00 .......(0.7%)

Unemployment went up to 9.8% in Sep, the worst in 26 years, another reminder that the worst recession since the 1930s is still inflicting widespread pain & emphasizes one of the biggest threats to any economic recovery: that consumers are worried about job losses & stagnant wages which will restrain spending. The US economy lost 263K jobs last month, from a downwardly revised 201K in Aug (worse than expectations of 180K). If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17%, the highest since record keeping began in 1994. More than a ½M unemployed people gave up looking for work last month. The number of people out of work for 6 months or longer jumped to a record 5.4M, making up almost 36% of the unemployed -- also a record.

Adding to this gloomy report, US factory orders fell in Aug by the largest amount in 5 months. The Commerce Dept said demand for manufactured goods dropped 0.8%, much worse than the 0.7% gain expected. The decline reflected plunging demand for commercial aircraft, a category that surged in Jul.

•Companies in U.S. Cut More Jobs Than Forecast; Unemployment Rises to 9.8%


Unemployment rate - 12 months





Change in Factory Orders -- 12 months




There seems to be a growing realization that any economic recovery will be slow & painful. More banks are having trouble collecting on more of their loans, bank problems are far from being solved. Talks with Iran are dragging on but they have important implications for global economies, not to mention world peace. Dow's chart below looks like it is very tired after a fabulous run.

Dow Jones Industrials --- 3 months