Market Wrap-Up

January 4, 2008

DOW 12,800.18 -256.54 (-1.96%) S&P 500 1,411.63 -35.53 (-2.46%) NASDQ 2,504.65 -98.03 (-3.77%) 10yr Bond 3.854% -0.047

The market opened sharply lower today after the release of a weaker than expected employment data report. The Department of Labor reported that only 18,000 new non-farm payrolls were created. Economist had expected 70,000. Unemployment also edged higher than expected to 5.0%.

The December ISM Services, a national non-manufacturing survey came in slightly above expectations with a reading of 53.9. A reading above 50 indicates growth. This was good news since the ISM Index, which measures manufacturing came in earlier this week at dismal 47.7 indicating contraction in the economy. A ready of 47 has occurred during the last two recessions.

Shares of Bed Bath & Beyond (BBBY) $26.19 -1.21 (-4.42%) got killed today after the company announced earnings that met expectations. What scared the traders was the company’s guidance going forward.

Some of last years biggest winners continue to be under pressure Apple (APPL) $180.05 -14.88 (-7.63%), Research In Motion (RIMM) $103.35 -9.47 (8.39%), Intel (INTC) 22.67 -2.00 (-8.11%).

Consumer discretionary and the financial sectors again were the worst performing sectors.

Traders now believe there is a 68% chance that the Federal Reserve will lower interest rates 50 basis point at their next meeting on January 30.

I would expect that the recent volatility seen will continue for some time. The good new is that the volatility will lead to true buying opportunities for long term investors.