Another red day on the street as retailers reported extremely weak sales for October; a tell tale sign of what is in store for quarter 4 and the holiday season. The Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. All the cards are lined up against the economy which was reflected by a drop in the Dow of 4.85%, the Nasdaq fell 4.34%, while the S&P 500 lost 5.03% to close at 904.88

Morning Outlook

Following the lead of U.S. trading, overseas markets traded down overnight. Japan’s Nikkei index fell 316 points or 3.55%. Domestic futures point to a higher open, as the market attempts to stabilize after losing 10% over the last 2 trading days. Dow futures are up over 100 points, while the S&P gained over 2% as Hong Kong’s Hang Seng index, down over 3% at one point in trading, came back to end 3.3% higher, breathing life into the equities market.

Corporate News

Ford Motor Co.(F) says it lost $129 million in the third quarter, and it will cut another 10% of its North American salaried work force. Excluding special items, Ford lost $1.31 per share, worse than Wall Street expected. Analysts surveyed by Thomson Reuters predicted a loss of 94 cents per share. No wonder they are begging the federal government for money!

Economic Calendar

The Bank of Korea cut its key interest rate by 25 basis points overnight, the third reduction in a month. Is the Fed content leaving rates at 1%?

8:30 AM
Employment Situation: The employment situation is a set of labor market indicators. The unemployment rate measures the number of unemployed as a percentage of the labor force. Nonfarm payroll employment counts the number of paid employees working part-time or full-time in the nation’s business and government establishments. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls. I would say at this point it should be called the unemployment situation…

10:00 AM
Pending Home Sales Index: A leading indicator of existing home sales for the month of August developed by The National Association of Realtors. This provides a gauge of not only the demand for housing, but general sentiment on the consumer front. People have to be feeling pretty comfortable and confident in their own financial position to buy a house and the ripple effect a housing purchase has throughout the economy.

3:00 PM
Consumer Credit: Measures the value of consumer credit outstanding. Changes in consumer credit indicate the state of the consumer’s finances and can forecast their future spending patterns. This will be an interesting figure to see, with over 9% of American homeowners behind on their mortgage payments or in foreclosure, it’s only a matter of time before credit is defaulted upon. The consensus for September is a decline of $ 0.5 billion. Credit declined 7.9 billion in July.