Sam Collins

Don't Let This Pullback Scare You

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Stocks were hit hard yesterday because of worse-than-expected manufacturing data and concerns that today's jobs report will be lower than expected. Stocks started off on the downside and never recovered, with selling picking up into the close.

News that the International Monetary Fund raised its forecast of 2010 global growth from 2.5% to 3.1% had no impact. Instead investors seemed focused only on the jobless claims. Initial claims climbed 17,000 to 551,000, and continuing claims came in at 6.09 million. 

This all backed the ugly ADP numbers on Wednesday, and set the stage for a nasty non-farm payroll report today.

The Wall Street Journal noted, "The market found the Institute for Supply Management's monthly index of U.S. manufacturing activity particularly worrying. The measure fell to 52.6 in September from 52.9 in August."

The Nasdaq (NASD) was hit hardest of all the indices, off more than 3%, as technology stocks were pummeled and the U.S. dollar was stronger again, indicating that a turn higher may be occurring.

Along with stocks, basic commodities were weak all day. The Dollar Index was up nearly 0.7%.

At the close, the Dow Jones Industrial Average (DJI) was off 203 points to 9,509, the S&P 500 (SPX) fell 27 points to 1,030, and the Nasdaq lost 65 points to 2,057. 

The NYSE traded 1.6 billion shares with decliners ahead of advancers by 5-to-1. On the Nasdaq 844 million shares traded with decliners there ahead by more than 5-to-1.

November crude oil gained 21 cents, closing at $70.82 a barrel, and the Energy Select Sector SPDR (XLE) closed at $52.24, down $1.68. 

December gold fell $8.60 to $1,000.70 an ounce. The PHLX Gold/Silver Index (XAU) lost $7.61, closing at $157.80.