2008.09.04 Briefing\'s Daily Market Updates

4:15 pm : The tone during Thursday trade was pessimistic from the start. Losses were wide and deep, worsening as the session progressed. The major indices closed near session lows, each shedding at least 3%. In turn, stocks marked the largest single session drop since late June.

Participants focused on the worst as mixed economic and sales data hit the wires.

The ISM Service Index came in at 50.6 for August, suggesting expansion since it is above 50. Economists were expecting a reading of 49.5. Still, the survey received little attention.

Jobless data trends continue to suggest a soft labor market as weekly claims climbed 15,000 to 444,000. Economists expect the employment report to show further weakening when it is released tomorrow. The ADP report offered a glimpse into that report, suggesting private payrolls fell by 33,000 during August.

On the upside, weak labor conditions help limit inflation. Yet that theme was ignored as labor costs inched 0.5% lower in the second quarter. Also helping stymie inflationary pressure, productivity increased 4.3%, up from the previously stated 2.2%.

Though soft labor conditions help diminish inflationary pressures, they can also eat into discretionary spending. Several apparel retailers posted a substantial downturn in their August same-store sales results. Limited Brands (LTD 20.71, -1.35), Pacific Sunwear (PSUN 6.45, -0.45), Abercrombie & Fitch (ANF 50.99, -3.72), and Gap (GPS 19.14, -0.83) all saw comparables slide.

However, Guess (GES 38.71, +0.46) gave an upside surprise when it posted better-than-expected earnings and sales results for its latest quarter. That reporting period included the mailing of fiscal stimulus checks. Still, the company opted to raise its guidance for 2009.

Bargain-shoppers continue to bolster sales at Wal-Mart (WMT 59.78, -0.01) and BJ's Wholesale (BJ 39.56, -0.25). Each put up healthy comparable sales increases.

The negative tone governing trade was exacerbated midday when Bill Gross, bond guru and manager of one of the world's largest bond investment companies, stated the global financial marketplace is in the process of deleveraging. He also implied in a television interview that he is waiting for the Treasury to step up its actions.

The comments weighed on an already depressed financial sector. Financials finished the session at their low, down 4.7%. Financials have shed more than 28% this year, which is more than any other sector in the S&P 500.

The stark negative tone led participants to overlook another retreat in oil prices. Oil was up early, but fell as much as 2.6% before finishing roughly 1.5% lower. Oil is down roughly 6.5% this week as a stronger dollar makes the price of imported commodities less costly.

The dollar's resurgence in recent sessions has been attributable to fears of slower global economic growth. It climbed 0.7% against a basket of major foreign currencies this session. That took it to its best level this year, or more than 2.5% higher year-to-date.

In the end the slide in stocks pushed all three of the major indices into bear market territory. Each are now down at least 20% from their respective highs reached last October.

DJ30 -344.65 NASDAQ -74.69 NQ100 -3.2% R2K -3.1% SP400 -2.4% SP500 -38.15
NASDAQ Adv/Vol/Dec 557/2.34 bln/2256
NYSE Adv/Vol/Dec 532/1.30 bln/2585


3:30 pm : The trading session is nearing its close and stocks have failed to show meaningful improvement. Losses remain deep and broad-based.

All ten of the major economic sectors in the S&P 500 are showing losses. The only sectors not facing a loss of more than 1% is the consumer staples sector. It is down 0.9%, instead.

Other defensive-oriented sectors are down more substantially. Healthcare is showing a loss of 2.4% and utilities are down 1.2%.

DJ30 -289.93 NASDAQ -62.47 SP500 -31.67
NASDAQ Adv/Vol/Dec 574/1.93 bln/2223
NYSE Adv/Vol/Dec 533/925 mln/2573