Hip, hip hoora--
Just as soon as the post-jobs relief rally began, it was over. Before we were even a half-hour into the trading day, major indexes turned mixed amid weakness in chips, housing, banks and airlines.
The stock market will close early at 1 pm ET due and the bond market will close at 2pm ET. All U.S. financial markets will be closed Friday in observance of the Fourth of July holiday.
Then came a report that showed the services sector slipped into contraction mode last month and the indexes were spiraling lower.
The ISM said its nonmanufacturing index dropped to 48.2 in June from 51.7 in May and lower than the 51 reading expected. Anything below 50 indicates contraction. New orders declined. A gauge of service-sector emploment was the lowest on record -- not a good sign for the next jobs report -- and a measure of prices soared to the highest in the survey's 11-year history.
The services sector accounts for a whopping 80 percent of economic activity, including businesses suchs a banks, airlines and hotels and restaurants.
The thinly-traded pre-holiday market had initially cheered the fact that the June jobs report wasn't worse than expected.
U.S. employers shaved 62,000 jobs from nonfarm payrollsin June, roughly in-line with the 60,000 drop expected. It was the sixth straight month of decline and the April and May payroll figures were revised to show 52,000 more jobs were lost than previously thought. The unemployment rate held steady at 5.5 percent.
Robert Brusca of Fact and Opinion Economics summed up the report this way: "...and the good news is: That the bad news isn’t worse."