Saturday, October 17, 2009

The Dow and unemployment, each toward ten

For a brief moment in over a year, the Dow Jones Industrial Index momentarily hit 10,000. While a large amount of the economy is still declining – unemployment is now at 9.8% and is expected to continue to rise – though the Dow has risen roughly 50% since March, the dollar continues to weaken.

As layoffs continue around the country, the recession doesn’t seem to be giving way to the massive stimulus package passed earlier this year. According to in the first half of last month, September’s layoffs counted over 12,600 displaced employees:

Sept. 16: ConAgra lays off 300 at a North Carolina facility where a June explosion cut production capacity.

Sept. 14: Eli Lilly & Company (LLY) fires 5,500 as it braces against patent expiration on four of its five top-selling drugs.

Sept. 11: Monsanto ( MON) doubles previous layoff plans from 900 to 1,800 jobs--8% of the company's total workforce.

Sept. 11: Dell ( DELL) closes customer service call center in Idaho, eliminating 500 jobs.

Sept. 10: Deere & Company (DE) lays off 367 production workers in Illinois as part the company continues ongoing layoffs.

Sept. 9: H.J. Heinz's (HNZ) frozen food arm fires 65 workers in Idaho.

Sept. 8: Valero Energy (VLO) closes a portion of a refinery in Delaware--cuts 150 employees and 100 contractors.

Sept. 2: Danaher (DHR) acquires two medical companies for $1.1 billion and pink-slips 3,300 workers.

Sept. 1: American Airlines (AMR) fires 921 flight attendants.

But the brief threshold-cross also prompted an ongoing debate among market professionals. Many carp the Dow average as a flawed surrogate for the market, though they concede its hold on public sentiment. Yet analysts also argued stridently over whether Monday’s highlight is substantiation that the market is headed up – or whether it conceals a wider weakening that has affected all but the biggest stocks.

-- Killswitch Politick

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