Art Cashin: The S&P Danger Number Now

As many signs hint at improvement in the U.S. economy, employment continues to be the fly in the ointment.

Art Cashin, director of floor operations at UBS, talks up the impact on Thursday's stock markets — and what investors can expect.

The mood on the trading floor has "soured somewhat," Cashin told CNBC. "There are kind of conflicting waves of concerns." Traders believe "problems in payrolls will continue."

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Cashin disputes economists' view that employment is merely a lagging indicator: "Not when your neighbor's getting laid off."

He cited traders' "other concern": "Did the Chinese stimulus create a false dawn for everybody?"

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Pointing to commodities and oil prices, which rose since Beijing's stimulus plan was enacted, Cashin says traders are now asking, "Are they going to reverse? Are we, as the FOMC warned, in an unsustainable recovery?"

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Cashin noted that yesterday, "the S&P tried and failed" to break through the March 8 high of 930. And "later on in the day, the bears got a chance to press the bet."

So what's the bearish danger number now?

"I'd watch 888...if they break through there, selling could accelerate a bit."

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Disclosures:

Disclosure information was not available for Cashin or his company.

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