- Commentary -

November 2, 2009 (FinancialWire) (By Genevieve Hawkins) — Investors were spooked last week as volatility climbed, and if news from automaker Ford (NYSE: F) isn’t as good as expected, the drop could signal the end of the rally.

Last Friday’s drop led the Dow down 2.6% for the week, while the S&P 500 lost 4.0% and the Nasdaq plummeted 5.1% to end October. Investors are nervous that government stimulus programs that have kept the economy propped up will be removed in the near future. If the programs are left in place, U.S. stock markets could rally.

Earnings season is winding down but a quarterly report from Ford, the only major U.S. automaker to avoid bankruptcy, will be analyzed by investors. A report on U.S. automobile sales in October could shed light on how many people are still buying cars now that the government’s Cash For Clunkers program is gone. The all-important October employment report is due this Friday; expect the markets to drop if unemployment tops 10% nationwide.

The markets have become heavily reliant on massive government spending, and as long as these programs are left in place, a rally could follow. Dropping stimulus spending may make more sense in the long run, but it represents a long and hard road for the stock market in the short term.

[Go to http://www.financialwire.net/?s=genevieve+hawkins to see more commentaries by Geneveive Hawkins.]

FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 Most Actives and NYSE/NASDAQ/AMEX greatest Percentage Losers and Percentage Winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Of the Most Actives, last session’s trading showed 14 advancers versus 11 decliners. Volume leaders were led by Citigroup Inc. (NYSE: C) trading 64,507,500 shares closing at $4.83 (up 1.3%), the SPDR Trust ETF (NYSE: SPY) trading 31,179,071 shares closing at $107.46 (down 0.2%) and Intel Corp. (NASDAQ: INTC) trading 30,600,472 shares closing at $20.49 (up 0.4%). Of last session’s Greatest Percentage Losers, stocks taking the greatest monetary losses were led by Hartford Financial Services Group Inc. (NYSE: HIG) trading on volume of 3,804,100 shares (losing $633.3 million), Buckle Inc. (NYSE: BKE) trading on volume of 490,000 shares (losing $174.0 million) and CIT Group, Inc. (NYSE: CIT) trading on volume of 12,567,100 shares (losing $47.0 million). Of last session’s Greatest Percentage Winners, stocks making the greatest monetary gains were led by Interactive Intelligence, Inc. (NASDAQ: ININ) trading on volume of 341,941 shares (gaining $60.2 million), Ocean Power Technologies, Inc. (NASDAQ: OPTT) trading on volume of 723,450 shares (gaining $24.4 million) and Empire Resorts Inc. (NASDAQ: NYNY) trading on volume of 141,097 shares (gaining $18.4 million). The complete chart for today’s FirstAlert(tm) Money Index Synopsis is posted at investrend.com (http://www.investrend.com/fa-index). Go to http://www.financialwire.net/?s=%22%27Money+Index%27+Synopsis for all the most recent FirstAlert(tm) “Money Index” Synopses.

The FirstAlert(tm) Economics Calendar lists ISM Manufacturing Index for October (10 a.m.), Pending Home Sales for September (10 a.m.), Construction Spending for September (10 a.m.), Treasury auctions 3&6-month bills (11:30 a.m.).

The FirstAlert(tm) Events Calendar showcases ALTI, SPWRA, FCEL, MXWL at Wedbush Morgan Securities Clean Technology & Industrial Growth Conference; AVID Investor Day; CSR at HSBC Asia Investor Forum; ENBD, NTWK at Goldman Sachs Borse Dubai International Investor Conference; HEV, MDS, NJ at Gabelli & Company Auto Aftermarket Symposium; RSYS, CRAY, TSYS, ZRAN at TechAmerica AeA Classic Financial Conference; VIP at Barclays Corporate Credit Conference.

FirstAlert(tm) Website of the Day: http://www.execsearch.com/

Quote of the Day: “In order to appreciate England one has to have a certain contempt for logic.” Lin Yutang

Today is: All Souls Day, Cookie Monster Day, Plan Your Epitaph Day.

Happy Birthday: James Sobieski, Daniel Boone, Marie Antoinette, James Knox Polk, Warren G. Harding, Burt Lancaster, Johnny Vander Meer, Ken Rosewall, Pat Buchanan, Stefanie Powers, Keith Emerson, Willie McGee.

Today in History: In Rocky Hill, New Jersey, U.S. General George Washington gave his “Farewell Address to the Army” in 1783. New Zealand officially adopted in 1868 a standard time to be observed nationally. North and South Dakota were admitted as the 39th and 40th U.S. states in 1889. In the United States, KDKA of Pittsburgh, Pennsylvania, started broadcasting in 1920 as the first commercial radio station. In California, Designer Howard Hughes performed in 1947 the maiden flight of the Spruce Goose; the largest fixed-wing aircraft ever built. “Twenty-One” game show contestant Charles Van Doren admitted in 1959 to a Congressional committee that he had been given questions and answers in advance. Horror movies pay homage to to goalkeeper Jacques Plante for donning a protective mask in 1959 for the first time in professional play, though one was worn in two games nearly 30 years earlier. Penguin Books was found not guilty in 1960 of obscenity in the Lady Chatterley’s Lover case.

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