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Stocks "Waffle" Under Jobs Pressure

Stocks are waffling and a lot of the talk is focused on Friday's employment report. Traders are also watching this morning's 10 a.m. release of the Institute for Supply Management's non-manufacturing index.

There are some other releases on jobs that will be watched for an early sign of what might be in that government jobs data though they are less important and do not give a conclusive read. One is the ADP jobs report and the other is Challenger, Gray and Christmas layoff report. ADP reported an increase of 58,000 private sector jobs in September.

Challenger says this morning hat planned layoffs fell nearly 10% in September. "They are down from what we saw in August by 9.5%...so far the impact of the credit crunch is contained in the housing sector. We have seen heavy cuts in the automotive sector and in housing finance, but it's not spilling over into other areas of the economy in terms of layoffs," said Challenger, Gray CEO John Challenger on "Squawk Box." Friday's jobs data for September is expected to show a 100,000 increase in non-farm payrolls, and traders are watching it carefully as an important data point the Fed will consider.

The dollar is lower this morning but holds above its record lows against the euro and other major currencies. Bonds are slightly firmer. Asian stocks continued their march higher, and European stocks got a boost from Deutsche Bank'sdisclosure that it will still earn $2 billion in the third quarter after it takes a writedown of $3 billion on fixed income securities and leveraged buyout loans. Oil is slightly firmer this morning after sliding $0.19 to $80.05 per barrel.

The Dow wilted yesterday after its big Monday run up. It was off 40 at 13,047. The S&P 500 slid 0.41 points to 1546, just seven points away from its all time high. The Nasdaq though rose as tech buying pulled up that market.

Banks in the Rinse Cycle
Deutsche Bank is the latest global banking player to come clean. UBS and Citigroup both said Monday they were taking writedowns, a disclosure that helped spark a big runup in stocks that day. "The one thing that held over the financials was uncertainty," said Cowen co-head of trading John O'Donoghue. "A lot of the laundry is out on the line right now, and they can all see it. As you know, when companies 'kitchen sink' the quarter, it tends to be almost cathartic."

Citigroup CEO Chuck Prince, meanwhile, looks like he's putting his management team through the wringer. He has ordered a review of the $3.3 billion in losses and writedowns at Citigroup's investment bank, says the Financial Times. Prince, who has reshuffled the management at Citigroup previously, may make personnel changes after the review, the newspaper says. The FT yesterday talked about how Prince personally is under fire for Citigroup's losses.

End of an Era?
The Wall Street Journal today says the reign of Wal-Mart is over. The newspaper claims Wal-Mart's time of "overwhelming business and social influence in America" is drawing to a close. The Journal says rivals are stealing its customers with greater convenience, more selections and higher quality and it is battling rivals who positioned themselves as more upscale.

This very thorough story comes just days after Wal-Mart said it is undertaking a major cost cutting campaign, which one might bet will get those very competitors scrambling. "Power Lunch" will look at this issue today. We're not saying we agree or disagree but history tells us that sometimes when such sweeping statements are made in print, the bad story could be out and it's time to think about buying.

VeriPhone
Verizon unveiled a new phone it hopes will compete with Apple's iPhone. The new phone is called Voyager and is made by LG Electronics . Verizon touts that it has faster wireless web access.

Frequent Fliers
USA Today reports that government employees spent $146 million in a year on business or first class airline tickets, in violation of government rules that say workers must fly coach. The newspaper quotes a Government Accounting Office report.

Questions? Comments? marketinsider@cnbc.com

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • CNBC Senior Commodities Correspondent and Personal Finance Correspondent

  • JeeYeon Park is a writer for CNBC.com. Follow her on Twitter: @JeeYeonParkCNBC

  • Rick Santelli joined CNBC Business News as an on-air editor in 1999, reporting live from the floor of the Chicago Board of Trade.

  • Senior Producer at CNBC's Breaking News Desk.