Back To Work For Traders

by Darren

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Traders were hoping for better news than the quarter point Fed rate cut they received. They were hoping for a larger cut to stimulate spending, but now they have to live with the fact that oil prices are at record highs, and a lot of the economic news coming out is flat.

The Labor Department said employers added 166,000 jobs to their payrolls in October, the most since May. The figure was nearly double what economists had expected, according to a Thomson/IFR survey. The unemployment rate held steady at 4.7 percent, in line with September and analysts’ consensus forecast.

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But Wall Street was clearly still shaky after Thursday’s plunge, which took the Dow Jones industrials down more than 360 points. The market has been mercurial lately, with economic data coming in mixed and the possibility of interest rate cuts ending, and Friday’s trading saw the major indexes alternating between gains and losses.

The biggest losers in the stock market Friday, as they have been in the past few months, were financial institutions — including Merrill Lynch & Co., Washington Mutual Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. Multiple analysts have issued research notes in recent days expressing concern about banks’ and brokerages’ exposure to the tight credit markets and the likelihood of subprime mortgage problems spilling into other types of consumer debt.

Until some definite good news hits the credit sector, it’s hard to imagine people will be enthusiastic about the stock market. Traders are already dealing with this news, and now they don’t expect too much more relief from the Fed.

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