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A strong south bound trend moved stocks and the major indices into lower territory, from the ringing of the opening bell this morning. As the trading session moved on, the strength increased at the hands of the Bears, with the major indices hitting their lows of the session, during the late afternoon. The cause of the downdraft, apparently from word from the Fed that there is basically a slim chance of a drop in interest rates as well as, the continuing concerns over the weak housing market.
At the closing bell, here is how the major indices ended the session: the DOW (Dow Jones Industrial Average) posted a triple digit loss of 143.39 points on the day to end the session at 13,305.47; the NYSE (New York Stock Exchange) posted a triple digit loss of 115.51 points to end the session at 9,583.17; the NASDAQ posted a loss of 24.29 points for a close at 2,605.95; the S&P 500 moved lower by 17.13 points to end at 1,472.29 and the RUSSELL 2000 moved lower by 10.21 points to close at 790.46. The FTSE All-World Index ex-US (top Large/Mid Cap aggregate from over 2,700 stocks from the FTSE Global Equity Index Series (GEIS) which covers 90% of the world’s investable market capitalization) posted a loss of 2.26 points to close at 254.36 and the FTSE RAFI 1000 posted a loss of 71.93 points to close at 6,079.80.
Economic Data:
MBA Purchase Applications: Compilation from the Mortgage Bankers’ Association of various mortgage loan indexes. This data is the leading indicator for single-family home sales as well as, housing construction. U.S. MBA Market Index Rises 1.3% to 622.9 from 615.2; U.S. MBA Purchase Index Rises 0.4% to 425.8 from 424 and U.S. MBA Refinancing Index Rises 2.3% to 1770.2 from 1729.6.
Challenger Job-Cut Report: Corporate layoffs comprised in a monthly, not seasonally adjusted report which indicates a trend in the labor market. Challenger U.S. August Job Cuts were 79,459, up 85.2% from July The number of job cuts announced by U.S. corporations in August jumped by 85.2% from the number reported in the prior month for a total of 79,459 according to a Challenger, Gray & Christmas survey released Wednesday. Job cuts were 21.7% higher this August than last year, when there were 65,278 job cuts. Job cut announcements so far this year totaled 515,855, 4.3% fewer than the 538,914 in the first eight months of 2006. The financial industry announced 35,752 job cuts last month, the most for any industry. "The story in August revolves around the dramatic collapse of the mortgage and sub-prime housing markets," noted John Challenger, CEO of Challenger, Gray & Christmas in a statement. "There were early warning signs in April as a few sub-prime lenders went under and released workers. However, what had been a relatively small number of job cuts suddenly turned into a deluge in August as financial institutions shut down operations overnight." The report is an anecdotal, non-statistical tally of job-cut announcements that are reported in major medial outlets. The report focuses only on job-cut announcements, not actual layoffs, and it doesn't take into account new hires or internal transfers at companies that have announced layoff. Challenger, Gray & Christmas, Inc. an outplacement firm, tracks layoff announcements and releases its Challenger employment survey monthly.
ICSC-UBS Store Sales: Weekly measure of comparable store sales at major retail chains which is related to the general merchandise portion of retail sales, as reported by the International Council of Shopping Centers. This date accounts for approximately 10% of total retail sales. ICSC-UBS Chain Store Sales were Up 0.2% for week of September 1st per The International Council of Shopping Centers-UBS; Retail Chain Store Sales Index rose by 0.2% in the week ended September 1st from its level in the week before on a seasonally adjusted, comparable-store basis, according to data reported today. This result followed a 0.3% increase in the prior week. "Sales improved slightly by the end of August, but the year-over-year momentum remained relatively steady and sluggish," said Mike Niemira, chief economist at ICSC who compiles the index. "We continue to expect sales will increase by about 2.0% to 2.5% for the month." On the year, chain store sales were up 2.3% in the week ended September 1st compared with a rise of 2.5% the prior week.
ADP Employment: This report is a national employment report computed from a subset of ADP records that cover roughly 225,000 business establishments and approximately 14 million employees. Macroeconomic Advisors was contracted by ADP to compute a monthly report to assist in predicting monthly non-farm payrolls from the Bureau of Labor Statistics employment situation covering private payrolls. ADP-Macroeconomic Advisers see August Payrolls increase by 38,000.
Redbook: General merchandise portion of retail sales covering only approximately 10% of total retail sales, this data is a weekly measure of sales at department stores, chain stores and discounters. Redbook U.S. Retail Sales fell by 0.5% for first four weeks in August versus July. National chain store sales fell 0.5% in the four weeks of August versus the previous month, according to Redbook Research's latest indicator of national retail sales released Wednesday. The fall in the index compared with a targeted 0.9% drop. The Johnson Redbook Index also showed seasonally adjusted sales in the four-week period rose 2.4% compared with August 2006 and relative to a target of a 2.1% gain. Redbook said on an unadjusted basis, sales in the week ended September 1st were up 2.7% from the same week in 2006, following a 2.4% gain the previous week. "Most companies in Redbook's sample are on or ahead of their monthly sales plans during the week," Redbook said. "Last minute back-to-school shoppers and bargain hunters boosted sales." Retailers reported strength in back-to-school categories such as school supplies, and children's and junior apparel, Redbook said, with higher-end women's clothing also considered by many to be a good performer.
Pending Home Sales Index: Reported by the National Association of Realtors, leading indicator of housing activity. U.S. Pending Home Sales Index fell by 12.2% in July and U.S. July Pending Home Sales fell by 16.1% from July 2006.
Beige Book: The Beige Book is a compilation of anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts. Notes from the Beige Book released today: Fed Beige Book Survey Period Ended August 27th; market Turmoil Effect On Economy 'Limited' Ex-Housing; market stress led to tightening lending standards; housing slump 'deepened' in most Fed districts; commercial real estate stable or expanding; moderate gains seen in consumer spending; little change seen in overall price pressures and most districts saw modest job gains.
Commodities Markets
The trend was higher across the board again today for the Energy Sector: Light crude moved higher today by $0.65 to close at $75.73 a barrel; Heating Oil ended the session higher by $0.02 again today at $2.10 a gallon; Natural Gas moved higher today by $0.18 to close at $5.81 per million BTU and Unleaded Gas closed higher by $0.01 at $2.00 a gallon.
Metals Market ended the session lower across the board today: Gold moved lower today by $0.80 to close at $690.70 an ounce; Silver moved lower by $0.09 to close at $12.36 per ounce; Platinum moved lower today by $0.70 to close at $1,273.00 an ounce and Copper closed lower by $0.04 at $3.26 per pound.
On the Livestock and Meat Markets, the trend was lower across the board today: Lean Hogs ended the day lower by 1.18 to close at 65.90; Pork Bellies ended the day lower by 1.65 at 88.78; Live Cattle moved lower by 0.58 to close at 97.05 and Feeder Cattle ended the day lower by 0.15 at 118.90.
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