On a week when Americans elected their first black President, prompting the biggest Election Day rally in 24 years–the Dow Jones industrials were up 3.28%, or 305.45 points, to 9,625.39 on November 4–the bottom fell out of the market on the following two days, leading to the worst two-day loss for the Dow and the S&P 500 since October 1987. Then on Friday, November 7, following the bad news that the unemployment rate rose to 6.5% for October, the market turned to black again, with the Dow finishing the day up 28.02 points, or 2.85%, to close at 8,943.81, or down 4.09% for the week. The S&P 500 was off 37.76 points for the week, or 3.9% drop, to 930.99.
There may well be more bleak economic news in the week of November 10, as advance retail sales for October will be released on Friday, November 14. There will be some interest in the earnings reports due out this week, notably AIG, which is set to report Monday, November 10, along with Sovereign Bancorp and Starbucks. Major retailers like Macy’s (November 13), Nordstrom, Kohl’s, and Wal-Mart (November 14) may provide more telling retail news.
The Labor Department’s Bureau of Labor Statistics reported November 7 that the unemployment rate rose to its highest level in 14 years in October–jumping from 6.1% to 6.5%–while nonfarm payrolls declined 240,000 in the month. The BLS also revised downward the number of jobs lost in the prior two months, to 127,000 for August and a staggering 284,000 in September. Total job loss for the year is 1.179 million; more than half of which, BLS pointed out, has occurred over the past three months.
President-Elect Barack Obama cited those job losses in his press conference on November 7, and radio address on November 8, in which he said “My priority is going to be, How do we grow the economy? How do we create more jobs?”