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MARKET WRAP

Stocks fell by 0.55% on the day after less than robust economic data this morning.  The dollar was higher on the day as the risk trade was turned off.  Commodities and bank shares led the decliners.  Tech was an outperformer on the day as investors anticipate stronger than expected earnings from Cisco.  The news is coming out as I type and appears much better than expected – not that the market should be at all surprised.  The most concerning move in the market was in copper prices which declined 3.5% as economic worries in Asia and overstocking caused prices to decline.  The VIX was little changed.  Volume was moderate and breadth was negative at 3:2.

From Daily Futures:

U.S. Economy
ADP Employer Services said that the U.S. economy lost 22,000 private-sector jobs in January, the smallest loss since February of 2008. Tomorrow morning, the U.S. Labor Department will release its monthly employment report. The March 2011 eurodollars were down .03 at 98.585.

The Institute of Supply Management said that its U.S. index of services increased from 49.8 to 50.5 in January, not as strong as expected.

The Mortgage Bankers Association said that its index of mortgage applications was up 21% last week to its highest level in six weeks. The 30-year fixed mortgage rate held near 5.01%.

The U.S. Treasury said that it will tie the record next week when it issues $81 billion of notes and bonds. The March U.S. T-bonds closed down 1.01/32nd at 117.12/32nds.

Grains and Cotton
So much for yesterday’s higher close – Expectations for big corn and soybean harvests in South America continue to pressure prices. March corn fell 12 cents to $3.53.

Livestock
After an eight-cent drop in two weeks, April hogs were up .22 at 67.07, the second day with a gain, fishing for support.

Sugar
The government of India told sugar mills that they must sell some of their sugar each week in an effort to increase supplies to local markets. March sugar closed down .82 at 28.58.

The European Union authorized the export of an extra 500,000 tons of sugar in an effort to take advantage of high prices and help to relieve the current shortage.

Energies
The U.S. Department of Energy (DOE) said that crude oil supplies were up 2.3 million barrels last week to 329.0 million barrels. Supplies of gasoline were down 1.3 million barrels and heating oil supplies were up 800,000 barrels. March crude oil ended down .25 at $76.98.

The DOE also said that refinery use fell from 78.5% to 77.7% of capacity last week. Over the past four weeks, gasoline demand was down .5% from a year ago while distillate demand was down 9.1% from a year ago.

Metals
March copper dropped 11.60 cents to $2.9735, the lowest close in eleven weeks, weighed down by growing concerns about China and its attempts to restrain the economy.

Currencies
The March yen dropped .0074 to 1.0994, pressured by concerns that the U.S. economy is coming around and may show more improvement in tomorrow’s employment report.

Eurostat said that retail sales volume was in the EU-27 was down .1% in December and down 1.0% from a year ago.

A composite index of services and manufacturing in the Euro area from Markit Economics slipped from 54.2 to 53.7 in January, still a sign of expansion. The March euro closed down .0061 at 1.3902.

An index of services in the U.K. fell from 56.8 to 54.5 in January, still a sign of expansion.

Australia’s Statistics Bureau said today that exports were up 4% in December while imports were up 6%.

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