Continued worries about future profits and job cuts leaves stocks down on the session. The Dow ($INDU) lost 215.45 points, or 2.51 percent, to close at 8,376.24. The S&P 500 ($SPX) fell 25.52 points, or 2.93 percent, to finish the session at 845.22. The Nasdaq ($COMPQ) gave up 46.82 points, or 3.14 percent, to 1,445.56. Volume remained moderate on the session with 1.47 billion shares traded on the NYSE and 2.06 billion shares exchanging hands on the Naz. Market breadth was negative by an 8-to-23 and 9-to-20 margin on the Big Board and Naz respectively.

Job cuts were the story Thursday with several big name companies reporting layoffs. Shares of AT&T (T) fell more than three percent on the session after Ma Bell announced it would lay off four percent of its workforce, or 12,000 jobs. Dupont (DD) also announced cuts, laying off 2,500 workers and possibly up to 4,000 contractors. DD shares were able to gain a third of a percent on the session to $23.69, well below its 52-week high at $52.49. Credit Suisse (CS) saw solid gains Thursday, up 5.59 percent after announcing job cuts totaling 11 percent of its workforce, or 5,300 jobs.

In related news, jobless claims fell during the week ending Nov. 29 to a level of 509,000. This was much better than the expected reading of 529,000 and last week’s figure of 530,000. However, the four-week moving average rose by 6,250 claims to 524,500. This is a level that points to weakness in nonfarm payrolls for November. Current expectations are for nonfarm payrolls to fall by 300,000 with the unemployment rate rising to 6.7 percent.

Retailers reported same-store sales for November, but the results were discouraging. Wal-Mart (WMT) was an exception, seeing better than expected results with consumers looking for the best deals. WMT shares bucked the downtrend Thursday on this news, up 1.34 percent to $55.11. Strength in shares of WMT lifted the S&P Retail Index ($RLX) by 1.46 percent, although a majority of retailers missed estimates. Wal-Mart’s rival Target (TGT) announced a 10.4 percent drop in same-store sales, leaving the stock lower by 1.28 percent. The fact that retailers have taken such a beating has some analysts calling a bottom, especially after gains following such bad news today.

Friday’s session could be volatile with the payroll report on tap. Stocks will trade in reaction to the nonfarm payrolls figure and how it compares with estimates. Traders will also be looking at the unemployment rate. The bulls will need to see a good session Friday in order for the major market indices to close in the black during the first week of December.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site