U.S. stocks and exchange traded funds (ETFs) retreated in morning trading on a weak jobs report, which underscored that the economy is still very much struggling.
The Labor Department reported that employers cut a 467,000 jobs in June, a larger-than expected number, sending the unemployment rate up to a 26-year high of 9.5%. This further supports the fact that economic relief isn’t in sight for the near future. Some experts believe that the unemployment rate will climb as high as 11% by year-end.
The situation in Europe is just as bleak, as the unemployment rate in the Eurozone hit a seasonally adjusted 9.5% as well. Unemployment in the 16 countries that use the Euro surpassed the 15 million mark.
In the automotive world, car sales by U.S. carmakers hit the brakes in the month of June. Overall annualized unit sales fell short of Wall Street’s 10 million forecast, coming in at 9.69 million. Of the large automakers, Ford (F) posted better results than all others. Automotive analysts hope that the federal government’s planned voucher program will ignite a spark in a much-battered industry.
On a positive note, U.S. factory orders rose more than expected in May, posting the largest number in nearly a year. The Commerce Department reported that total orders rose by 1.2% in May, beating the 0.8% forecast by economists. This increase reflected a 1.8% jump in demand for durable goods and a 0.7% increase in non-durable goods. Despite the encouraging news, the Industrial Select Sector SPDR (XLI) was down 2.6% in intraday trading.
Overall the markets are fairly quiet this morning, perhaps traders and investors are gearing up for 4th of July – the markets are closed tomorrow. The Dow Jones Industrial Average is down about 2%, the S&P 500 dropped nearly 2.2% and the Nasdaq declined by about 2.4%.
For more stories on industrials, visit our industrial category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.