Worse than expected results in the non-farm payrolls report capped a week of disappointing economic data. Factory orders reversed back into negative territory. In spite of the negative news stocks are off their worst levels of the session as traders buy the pull back. Doubts about the strength of the economic recovery weighed on oil, which fell more than 2% back toward $69.00 a barrel.

Foreign markets were down. The Chinese Shanghai market is still closed for holiday and re-open on October 9th. The Hong Kong Hang Seng plunged 2.7% to a three-week low. A rising yen continues to put pressure on Japanese exporters. The Japanese NIKKEI index lost 2.4% to close at a two-month low. In Europe stocks were down across the board again. Investors ignored positive news that home values in England rose for the fifth month in a row. The English FTSE lost 1.1% and closed under the psychological support level at 5,000. The German DAX lost 1.5%. The French CAC-40 gave up 1.9%.

The headline report today was the non-farm payrolls (a.k.a. jobs) report. Economists were expecting the U.S. economy to lose about 180,000 jobs in September. After the disappointing ADP employment report earlier in the week and the rising initial jobless claims the whisper number was probably rising toward -250,000 jobs, which was what Goldman Sachs predicted. The Labor Department released the numbers this morning and the jobs report showed a loss of 263,000 compared to a loss of 201,000 in August. The unemployment rate rose from 9.7% to 9.8%, a new 26-year high. This puts the official number of unemployed near 15.1 million workers.

The Commerce Department released the August factory orders report, which surprised analysts. Factory orders fell 0.8% in August compared to a 1.4% gain in July. Economists were looking for a gain of 0.7%. The August drop was the biggest decline in several months. Transportation orders plunged more than 9% after a nearly 18% rally in July.

At the moment the S&P 500 is in negative territory but only by a couple of points. The index bounced from a test of the 1,020 level and its rising 50-dma this morning. The NASDAQ composite is flirting with unchanged after hitting 2,040 this morning. The Dow Industrials are up a few points at 9,512 after dipping to 9,430 this morning. The small cap Russell 2000 index is also bouncing from its 50-dma.

The best performers today are the airline stocks and gambling stocks with both the XAL index and DJUSCA index up 2.4%. Insurance, biotech, drugs, and financials are sectors in positive territory this afternoon. The worst performers are oil services, cyclicals and homebuilders.

Let's take a quick look at charts for the major averages:

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

Scanning the OptionInvestor.com play list for movers I see that ATI is bouncing from support near $32.00. CAT is rebounding from a test of the 50-dma. CNX came close to testing support near $42.00. DO is retesting its long-term trendline of support. Given the sharp decline in the last few days we did see a few stocks get stopped out this morning. That list includes CF, HP, NYX, OIH, and SPW.