Continued worries about Europe, not the Obama jobs bill, are "still driving the bus" that is the U.S. stock market, Art Cashin told CNBC Monday.
The jobs package President Obama is sending to Congress today will have no material effect on the market in the short run, said the UBS Financial Services director of floor operations. "What’s material is we’re going to test this morning’s lows. If they don’t hold, if they break through 1142-1140 on the S&P, things could get tricky down here."
The Standard & Poor's 500 is very close to that level.
European share prices fell to a 26-month low on Monday because of the lack of political unity in the euro zone in tackling the debt crisis.
This is a "self-testing market," said Cashin, "It's like a patient who had a massive heart attack. He’s gotta see how much he can recuperate, how far you can walk without getting winded. This morning’s lows will be critical. If we break through, selling may accelerate."
People are skeptical about the Obama jobs plan, he added, because they remember the Obama stimulus plan, "which was not very stimulating," and was supposed to hold the unemployment level below 8 percent. The rate is currently at 9.1 percent.
People "see things going on around them that don’t provide a rebound," said Cashin. "It’s not that they think the president is misrepresenting things, it’s that they think that his team is not looking at the same economy the people on Main Street are."
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