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Minyanville's Market Recap: Job Loss Surprises Markets, Stocks Fall


Job losses and heavy downside revisions surprised the markets. Major indexes fall!

Stocks continued its declines today when the Labor Department reported the first fall in employment in four years. The Dow finished lower -1.8% to 13,113, S&P fell -1.6% to 1453, and the Nasdaq fell -2.0% to 1958.

The Labor Department surprised the markets this morning with a loss of 4,000 jobs on nonfarm payrolls. The consensus estimates called for a gain of 110,000 jobs. In addition, the report included heavy downside revisions to previous month's data. July job growth was revised downwards to 68,000 from 92,000, and June gains were revised to 69,000 from 126,000. The news resulted in Goldman Sachs (GS) and Bear Stearns (BSC) changing their expectations of a 50 basis point and 25 basis point reduction respectively by the Fed at its September 18 meeting. Please read Toddo's Into The Sunset as he gives his thoughts on the FOMC. Minyan Peter also came out with a Minyan Mailbag explaining why Europe Matters More.

Former Fed Chairman Alan Greenspan added to the jitters stating the current market turmoil reminded him of the markets in 1987 and 1998. The view is consistent with Professor Cooper's and Professor Sedacca's talk on the Buzz and Banter. Read Professor Depew's Five Things You Need To Know for his thoughts on Greenspan's comments. Toddo also chimes in on his piece Freaky Friday Potpourri: The Fed's In A Box.

Adding to the bearish sentiment this morning was news of Beazer Homes (BZH) receiving a default notice from the U.S. Bank National Association. Beazer denied being in default and said the notices alleged events of default if the situation was not remedied.
Nonetheless, BZH shares plummeted 12.9% to $9.50.

Among the bullish tones, Gold was a hot topic on the Buzz. Professor Lewis noted that the GLD inhaled another 14 tonnes with spot gold testing new highs. Please also read his article The Past, Present and Future In Gold as he gives great insight into the precious metal that is in heavy demand.

Below is a recap of the idea flow on today's Buzz and Banter. Please note that stocks may appear on both bullish and bearish categories due to long and short term trades by our many Minyanville professors. In addition, click on our Buzz Bits for more of an in-depth summary of what happened real-time.

Some bullish trade or investment ideas: GLD, UA, FMD, VMW, CIEN, NTAP

Some bearish trade or investment ideas: HOG, APKT, FDRY, CFC, AAPL, TRAN, BKX, CF, MRO, SPX

These four day work weeks always end up feeling longer. Be safe, Minyans! Ya'll have a great weekend!
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No positions in stocks mentioned.

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