Market Insider/Friday Look Ahead
Thursday's 400-point range in the Dow was the grand finale to a volatile month that will certainly go down as one of the worst for stocks.
Stocks had a rough start, with worries about weak jobless claims and losses at MBIA taking center stage. There were also fears the bond insurer could be downgraded by rating firms. But MBIA executives were more optimistic than expected on the company's conference call and that helped lift stocks, setting them on a course for a rally. The Dow finished Thursday up 207 points or 1.7 percent. It closed out the month with a 4.6 percent loss, its worst January loss since 2000 when it finished 4.8 percent lower. It was the Dow's worst month since December, 2002 when it lost 6.2%.
The Nasdaq finished the day up 1.7, closing out January with a 9.9 percent loss, its worst January performance ever. The S&P 500 finished January 6.3 percent lower, its worst January performance since 1990.
The January employment report is the big item on the agenda Friday. But there is other important news to watch, including earnings from Chevron and Exxon Mobil before the bell. Auto sales for January will be released by automakers throughout the day.
Economists expect jobs data to show that 75,000 new non farm payrolls were added in January. Despite disappointing weekly jobless claims Thursday, there was some optimism by the end of the trading day that the jobs number could be stronger than expected. ADP data earlier in the week came in well above expectations. "Even if the number is not that good, there's a lot of momentum to buy," said one trader in the final hour of Thursday's session.
Even in the oil markets, the big focus will be jobs data, not necessarily the OPEC meeting in Vienna. Oil prices fell some 4.4 percent to $91.75 per barrel Thursday on concerns about a weakening economic picture.
"The OPEC meeting is a wait-and-see meeting, which means that the exporters are not likely to change production levels," according to Cambridge Energy Research Chairman Dan Yergin. "Like everybody else, the exporters are waiting to see how slow is the economic slowdown, and then for them, the impact on oil demand, especially going into the spring."
Yergin, CNBC's global energy analyst, said that OPEC has no inclination to add supplies to the market, despite pressure from developed nations. "On the other hand, it would be most untimely to reduce output when concern is so high about the global economy. The key meeting will be when the ministers reconvene in March. The wild card for prices right now, in light of the Fed rate cuts, is what happens to the dollar."
Other data reported Friday includes January ISM manufacturing survey, released at 10 a.m., December construction spending, also at 10 a.m. Consumer sentiment is also released at 10 a.m.
Some news from late Thursday will likely spill into morning trading. Tech favorite Google reported disappointing earnings and sales which knocked its stock down as much as eight percent in late trading. Motorola , whose stock has been a sorry performer, said it would consider selling or spinning off its handset business. Activist investor Carl Icahn said the move is a step in the right direction but he will continue his proxy fight.
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