Small caps sink after bleak employment report

Small-cap stocks opened lower, tugged down by a sobering picture of the jobs situation in the United States after the monthly employment report showed a staggering number of jobs have been lost in November. At 9:59 a.m. ET, the Russell 2000 (NYSE:IWM) was down 9.58, or 2.18%, at 429.95.

The Labor Department report showed that unemployment climbed to 6.7%, the highest rate since 1993. Meanwhile, the jarring loss of 533,000 jobs in November was the worst decline since December 1974. What’s more, job losses for September and October were revised upward, meaning that the United States shed 1.25 million jobs in the last three months alone and nearly 2 million so far this year. Our neighbors to the north are also feeling the pain, as data this morning revealed that job losses in Canada climbed to the highest point in 26 years.

It will be interesting to see if investors are still willing to bet that all these terrible economic reports are already priced into the stock market and try to jump-start a rally as the day progresses. There has consistently been talk that these dreadful economic reports are simply not surprises anymore; however, one cloud hanging over the market is the fate of U.S. automakers. Some speculate that if General Motors Corp. (NYSE:GM) is forced . . .

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