Opening slide on tap after dour weekly jobs data

Small-cap stocks are expected to open sharply lower, pressured by concerns about the global credit contagion and a leap in unemployment claims to seven-year highs which completely offset any optimism tied to the Senate’s approval vote for the financial rescue plan. The Russell 2000 (NYSE:IWM) is expected to open about 1% lower, which would translate to an open near 664.50.

The weekly claims report came in at 497,000, which was way above the forecast of 468,000. In addition, the government revised last week’s number slightly higher. The somber claims figure will only sour the mood in front of Friday’s big monthly Labor Department report on payrolls and the unemployment rate.

The Senate passed the rescue plan by a vote of 74 to 25, and the revamped bill will now move over to the House for a vote, which will likely take place Friday. With the addition of tax cuts and FDIC bank deposit measures, the House is expected to pass the bill.

If the jobs report Friday comes out with bad news (like another rise in the unemployment rate), it would be hard to anticipate that the House would be willing to risk not passing the $700 billion bailout.

The Senate was expected to pass the revamped “Paulson Plan” rescue bill, and in a classic case of “buy-the-rumor, sell-the-fact” stock markets around the world did not stage an immediate relief rally on the Senate’s OK. European shares . . .

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