Wednesday, June 1, 2011

Banks Slash Job Outlook; Stocks Sink, June 1 2011

Edward Krudy
Reuters
NEW YORK (Reuters) – Stocks skidded on Wednesday as more weak economic data cemented fears the U.S. recovery was running out of steam and prompted Wall Street firms to slash forecasts ahead of the closely watched payrolls report on Friday.

Goldman Sachs and several other big financial institutions cut estimates for non-farm payrolls growth in May after ADP Employer Services reported much lower-than-expected growth in private payrolls last month.

“If we have a payrolls number with revisions that is anything like the ADP on Friday, then we are going to struggle over the next couple of months,” said Jim Paulsen, chief investment officer at Wells Capital Management.

Traders are now talking about a “whisper number” of 100,000 jobs added in May, down sharply from the consensus of 180,000 going into Wednesday, according to David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore.

Full story here.

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