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For the second day in a row that market lacked any real sense of direction despite lots of news. Today we received a mixed ADP report, which is a prelude to Friday’s big Nonfarm Payroll report. The ADP report stated that 84,000 jobs were lost in December, down from 145,000 job losses in November. Still, the number was more than the 75,000 that economist had expected.
The December ISM Service Index improved to 50.1 from the 48.7 in November. A number greater than 50 indicates expansion in the economy, while a number below 50 indicates contraction in the economy. This missed economist estimates of 50.5.
The weaker dollar allowed commodities to rally. The CRB Commodity Index gained +1.5%. Oil prices climbed +1.7% to finish pit trade at $83.18 per barrel. Prices had been up as high as $83.52 per barrel, a fresh 52-week high. Gold ended the day 1137.90 +19.20.
GMAC Post Major Loss. GMAC expects to post Q4 loss of around $10 billion, largely because of writedowns on risky mortgage assets. $3.8 billion of the loss came from the planned sale of a mortgage unit that CEO Michael Carpenter called "a millstone around the company's neck." The government owns a 56% stake in GMAC, and could see its holdings rise to 80%.
Dodd Says No More. Senator Christopher Dodd (D, CT), chairman of the Senate Banking Committee, plans to announce his decision not to seek re-election this year. Dodd, once closely connected to the insurance and hedge fund industries, has been under the gun since the housing crisis began because of possible special deals he received from Countrywide Mortgage. This comes after Byron Dorgan (D,ND) and Bill Ritter (D,CO) made similar announcements.
Leading company groups today were Aluminum +5.12%, Platinum & Precious Metal +5.05% and Iron & Steel +4.10%.
The biggest lagging company groups were Travel & Tourism -3.38% and Fixed Line Telecommunications
-3.10%.
Advancing Sectors: Materials +1.5%, Energy +1.0%, Health Care +0.5%, Utilities +0.5%, Financials +0.4%, Industrials +0.2%
Declining Sectors: Telecom -3.0%, Tech -0.9%, Consumer Staples -0.1%
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