Good day! The markets were thrilled, at least initially, by news that terrorist Osama bin Laden had been declared dead over the weekend. But as skepticism rose and believers questioned the impact of such news, eyes turned away from the announcement and back towards this week's economic data.
The market's recent rally had been slowing as the weekend approached, leaving it vulnerable to further corrective action into this week. The bin Laden news flushed things out even further. Last week's disappointing GDP data and continuing concern over the jobs data have shown us that the economy is anything but roaring. The sluggish pace of the recovery is likely to be in the forefront of investors' minds throughout this week.
On Monday, the Institute for Supply Management reported that its manufacturing index fell to 60.4% in April. Meanwhile, construction spending rose 1.4% in March.
On the economic front, Friday's employment data will be the most anticipated news for the week, but factory orders are out Tuesday morning, while the ADP National Employment Index comes out on Wednesday, and the Labor Department will release last week's jobless claims on Thursday.
Dow Jones Industrial Average
After spiking on Sunday evening, the index futures slowly began to correct heading into the early-morning hours on Monday. The initial correction was gradual, but low-level bases within the initial correction kept the bias bearish and the pace of the selloff increased as the opening bell approached. Once final low-level base on the five-minute time frame gave way into the bell, creating the first intraday selloff. A series of larger bear flags followed as the session wore on. This kept the market active and created a stronger day for short-term traders than I'd initially anticipated since the increased momentum also increased opportunity. The session ended near intraday lows, but the index futures remained weak into Tuesday morning.