Leading Indicators
The Conference Board's Index of Leading Economic Indicators lost ground for the third straight month, with a consensus-beating decline of 0.7% in September. Thus spake the Board: the largest negative contributors to the leading index were the index of consumer expectations and initial claims for unemployment insurance. A double Katrina bummer, in other words, though the index had begun its descent prior the arrival of the hurricanes.
Today's unemployment claims reports were a bit more mellow than those that helped sink the Leading Indicators: Initial claims fell to 355,000, down 35,000 from the prior week. Continuing claims continuing rose to 2,894,000, 36,000 more than last week, as some of the nearly half-million estimated Katrina-related claimants flow through the benefits systems.
A few years ago, Wall Streeters maintained a superstition that initial claims below 400,000 correlated with an expanding job market. I'm not sure when exactly that faith collapsed, but nobody talks about it much any more.
Another big deal today was the decline in crude oil futures, with NYMEX crude below $60/barrel. Energy stocks took a beating, as did the broad market, which lost everything it had gained yesterday.
Cheer up, everybody: we're almost two-thirds of the way through Octoberfest on Wall Street.