Outplacement firm Challenger Gray & Christmas said its monthly tally of job cuts showed the pace of layoffs quickened in February, with the government and nonprofit sectors picking up where telecom, aerospace and transportation sectors left off in 2002.
According to the firm's research, government and nonprofit sector slashed 41,559 employees from payroll in February, more than any other sector, as state and local governments look to cut expenses as severe budget crunches see revenues declining as the economy struggles to recover.
Telecommunications, which ranked at the top of the job-cutting industries for most of 2002, fell to 10th in February, with just 6,169 job cuts.
In 2003, retailers have cut a hefty 51,063 jobs so far, the most among any sector and almost twice the number cut during 2002. The Challenger Gray & Christmas survey only takes into account official work-force reduction announcements.
The news from Challenger Gray & Christmas looks to confirm last week's Labor Department report that showed the number of weekly jobless claims rising above the 400,000 level to 417,000 and has extended losses to the major indexes.
The Dow Industrials (INDU) 7,756 -1.03% is currently trading near its session lows after trading in positive territory only briefly after the opening bell. I'm currently looking for resistance to begin building near the 7,805 level, which from last night's Index Trader Wrap, would be the 61.8% retracement from our WEEKLY pivot analysis.
The broader S&P 500 Index (SPX.X) 827.64 -0.85% is just off its lows of 827.02, with sector weakness in the Dow Jones Home Construction Index (DJUSHB) 302 -4.98% being partially exacerbated by Fed Chairman Alan Greenspan saying that while he doesn't see a housing bubble on the horizon, he does expect home mortgage refinancing to cool off in 2003.
Sector bullishness is limited with the Gold/Silver Index (XAU.X) 70.75 +1.23% the only sector showing a gain greater than 1%.
Helping to bolster precious metals equities is the U.S. Dollar Index (dx00y) 98.93 -0.16% showing weakness in the dollar, as this index edges near its 52-week low of 98.65 set on February 4, 2003.
Treasuries, which hovered near unchanged levels after stocks opened for trader, are seeing modest selling in the 30-year Treasury (us03h) $115'27 -0.02%, being offset by modest buying in the 10-year note (ty03h) $117'000 +0.08%.
The somewhat "delayed" reaction with stocks now extending losses after several days of strong buying in Treasuries, looks to be catching up with equities, and may have some shorter-term equity bulls looking to keep losses small, or locking in gains as they begin to erode.