Softer Retail Sales, Higher Jobless Claims Raise Economic Concerns

The market has opened under some selling pressure this morning, on the heels of another weak earnings report from insurance giant AIG. The company reported a massive loss of $5.4 billion, which weighed on the financials immediately last night, and carried over this morning.

This morning, less than stellar retail sales from Wal-Mart (WMT) and Target (TGT) hit the retailers and raised concerns about the strength of the consumer and just how much impact the rebate checks are having.

Also, jobless claims came in above expectations, although I am hearing there were some one-time items that may have skewed the figures on the upside. Nonetheless, the figures raised concerns about the labor market, and the 10-year yield is falling below the 4.0% level as a result.

Asian markets were mixed overnight, with Japan trading lower after Japan's cabinet office described the economy as "worsening". Also, the European Central Bank left its benchmark rate unchanged at 4.25%. The dollar is up this morning vs. the Euro.

Oil is also bouncing this morning, back above $120. Natural gas is up +2.1% also, helping the energy patch stocks bounce.

The market seems to be handling the trifecta of negative news this morning well so far. I think it would be constructive for the market not to give back too much of the last 2 day's rally, and would signal that there is probably more upside ahead.