Stocks opened slightly stronger but reversed to the downside pretty much within the first 30 minutes of the day. Losses accelerated after reports on Consumer Confidence and housing and we made the lows of the day during the second hour of the day.
From there it was the same as yesterday...sideways action and not much movement. The final hour saw again a pick up in activity but at the end all of the major averages still closed lower for the day, albeit off their earlier lows.
When everything was set and done the Dow had lost 82.38 points (-0.97 %) and the S&P was down - 7.91 points or - 0.85 %.
It was by all accounts another uneventful day. Yesterdays gains were for the most part erased and once gain it seemed that all the action was done by 11.00 am ET.
The only number released today was the reading of the Consumer Confidence Index for the month of May. The number was expected to come in around the 54.8 level but to the surprise of market professionals it came in at a measly 49.8 %.
The lower reading pressured stocks immediately and the market never managed to recover from it. It looks to me like market participants are now getting more worried about the prospect of a bad unemployment report. As such the reported number increased the "fear factor" ahead of the unemployment number.
If anything it makes clear that the current economic situation might be improving (or at least not getting any worse) but that the consumer is really not feeling the benefit of it yet.
We will have some employment related economic numbers out on Thursday and it seems that this might be the only thing left which can bring some activity back into the market before the long holiday weekend.
Until tomorrow,
Steve Benger
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