Stocks Break Through Level

The S&P 500 broke through a key technical level on Friday,down 12.8% from its April high.Such a move indicates a prospect for further substantive declines.There's nothing technical holding stocks back from falling into bear territory now.It was the market's second biggest drop of the year,leaving it at its lowest point since February,spooked by Hungary's warning that it could well default on its debt and a lackluster employment report.Indeed,the report calls into question the economy's ability to stay out of a double dip recession,with private sector job growth coming in at a mere 41,000,far less than estimated and less than in previous months.Companies were simply just not hiring to any extent;instead,they increased hours worked by existing employees to cover any new orders.This will neither help the 15,000,000 jobless nor spur consumer spending,seen as critical to recovery.
The S&P futures were down 37.50 on Friday evening,and bond futures climbed.For the week,the S&P fell 2.3,while the Dow lost 2.0 and the NASDAQ slipped 1.7.
The baseball world will be watching Washington Nationals pitcher Stephen Strasburg make his major league debut on Tuesday in the nation's capital.With a huge reputation for excellence preceding his arrival,anything less than a shutout will be a letdown for the jazzed D.C. sellout crowd.Seldom if ever has so much been expected of a rookie.Few cautionary voices are to be heard above the happy talk,voices who remember that the lower echelons of pro baseball are just not the same as the major leagues.There is a quantum leap that a rookie has to make,whether his name is Strasburg or not.

Headwinds Hinder Market

A number of headwinds both global and domestic conspired to keep the market in a trading range this week.In foreign news,Spain's credit rating was lowered a notch by Fitch,one of the three ratings agencies who played a controversial role in precipitating the financial crisis.Tensions between the two Koreas remained high over North Korea's sinking of a South Korean navy vessel,killing dozens of sailors.Domestically,the moratorium on deep-sea oil drilling threw earnings estimates of energy firms into question;the Chicago Purchasing Managers' Index missed estimates;and consumer spending came in unexpectedly flat.A market without buy and hold sentiment resulted from the swirl of events casting doubt on the recovery that had seemed so promising a few months ago.Twenty percent of retail investors say they are sitting in cash for at least the next three years,to the chagrin of brokerages.
Next week,the employment report will garner a lot of media attention,but overseas events could well eclipse it in the minds of worried investors.If a second credit freeze is really upon us,any gains in employment would have to be seen as suspect.They would be hard to sustain in the context of poor macro-economic conditions.Consequently,the S&P futures were down 12.60 this evening,while bond futures rose.
The Toronto Blue Jays held sway over the Baltimore Orioles with a 5-0 lead,while Philadelphia and Florida were tied 2-2.Phil Mickelson will attempt to achieve the number one ranking in professional golf this weekend,a designation that has so far eluded him.