MARKET WRAP – RUNNING SCARED BEFORE HALLOWEEN

Investors were running scared this afternoon as comments from Wilbur Ross & Carl Icahn spooked investors about the state of the commercial real estate markets.  Investors were also piling out of the risk trade as the dollar reversed course on weak consumer data.   The market finished the day down 2.8%.     Daily futures has the action from all markets:

U.S. Economy
The U.S. Commerce Department said that personal incomes were down less than .1% in September while spending was down .5%, roughly as expected. The December S&P 500 is trading lower, just one day after a positive third-quarter GDP report.

The University of Michigan’s index of consumer sentiment fell from 73.5 to 70.6 in October, a little better than expected. The December 2010 eurodollars closed up .11 at a new contract high of 98.46.

The National Association of Purchasing Managers said that its Chicago index increased from 46.1% to 54.2% in October, the first sign of expansion in over a year.

Grains and Cotton
Rain continues to hammer the Midwest in a line from Michigan to Louisiana, making the harvest difficult. The ten-day forecast, however, looks drier overall. December corn fell 13.5 cents to $3.66.

Earlier this week, the USDA said that 76% of the winter wheat crop was planted, slightly behind schedule. Recent rains are likely giving the crop a good start at a time when there is plenty of wheat already available in the U.S. December wheat closed down 9.5 cents at $4.942, pressured by today’s stronger dollar.

Livestock
Its been a tough time for the cattle industry. R-CALF USA, representing independent cattle producers, sent a letter to the White House, asking for help. They said, “The losses to U.S. cattle feeders continue and are compounding rapidly. Those remaining in the cattle feeding business are becoming fewer and fewer each day.” December cattle closed down .60 at 85.67.

After the close, the USDA estimated this week’s beef production at 518.9 million pounds, up 4.0% from a year ago. Pork production was estimated at 463.9 million pounds, down 3.5% from a year ago. December hogs finished down .50 at 56.70.

Lumber
It looks like yesterday’s GDP report triggered some short-covering in lumber. January lumber was up $8.50 at $211.00 after yesterday’s limit-up close.

Housing starts in Japan were up 3% in September, but down 37% from a year ago.

Energies
December crude oil fell $2.87 to $77.00, giving back yesterday’s big gain from the positive GDP report.

Metals
December gold closed down $6.70 at $1,040.40 with growing concerns about the economy’s ability to keep recovering.

Currencies
Japan’s Statistics Bureau said that the unemployment rate improved from 5.5% to 5.3% in September, the best in four months. Also, consumer prices were down 2.2% in September from a year ago. The December yen jumped up .0185 to 1.1113, the highest close in two weeks.

The Bank of Japan also said that it would stop buying corporate debt by the end of 2009, a sign that things are getting better.

Statistics Canada said that real GDP was down .1% in August and down 4.0% from a year ago, weaker than expected. The December Canadian dollar fell 1.17 cents to 92.62, the lowest close in nearly four weeks.

Eurostat said that the unemployment rate in the EU-27 inched up from 9.1% to 9.2% in September, the highest rate since the data began in 2000. The December euro closed down 1.18 cents at $1.4726.

Germany’s Federal Statistics Office said that retail sales were down .5% in September and down 3.9% from a year ago.

Source: DF