Techs, sloppy jobs data counter value seekers

Small-cap stocks meandered through the morning moving back and forth on either side of steady ground as investors juggled negative input from economic data against oversold conditions in the shadow of the previous bounce off the lows. By midday, the bears were starting to reassert their voice, and at 12:19 p.m. ET, the Russell 2000 (NYSE:IWM) was down 3.78, or 0.84%, at 449.01.

It was interesting to see that the market was clearly bifurcated today; even when prices for the major index products were hovering near steady levels, it’s not like the underlying stocks were content just to waffle through the day unchanged. Looking at sector activity, sizable gains were seen for real estate services, industrial REITS, wireless telecoms, coal, forest products, steel, casinos, and metals and mining stocks. Meanwhile, big losses were registered for homebuilders, consumer finance firms, industrial conglomerates, department stores, automobile manufacturers, investment banks and brokerage firms, systems software companies, advertisers, specialized finance and aluminum stocks. So, even when the indices were basically flat, the individual winners and losers were fairly demonstrative.

The market is struggling to decide if today’s ugly report on weekly unemployment claims was already priced into the market and therefore a non-event. The last time the market decided to “fade” the trend suggested by negative jobs data was less than a week ago on Friday’s big monthly employment report. The fade strategy worked for a day, but got clobbered this week. As for today’s release, weekly unemployment claims soared to 516,000, the highest level in seven years. What’s more, the number of people filing continuing claims rose to 3.9 million, the highest level in 25 years. Sure, we’ve got more people living in America now than we did seven years ago, and certainly more than we had 25 years ago, but it’s still unsettling knowing that more people are struggling to find a job than we’ve seen in a quarter of a . . .

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