Yesterday’s news from the Labor Department, that the U.S economy lost 467,000 jobs in June, sending the unemployment rate to 9.5%, renewed concerns that the economy is in trouble. That sent oil prices tumbling 3.7%, with crude for August delivery falling $2.58 to close at $66.73.

Yesterday’s price decline is being followed by a drop of $1.22 today, sending crude price down to $65.51.

IBM (IBM) was a big contributor to the 223-point loss in the Dow Jones Industrial Average on Thursday, with the $3.11 drop in the stock. The pull back however, put the stock at a key support level from which it should bounce off, if we don’t get any bad economic or company specific news in trading early trading next week.

Looking at a six-month chart of IBM, we see that at the end of March though the first couple days of April, IBM rallied right up to the $102 area, but then pulled back slightly, and traded in a range between $98 and $102, never quite being able to break above $102.

Then on April 28, the stock gapped up at the open and over the subsequent four trading days, the stock continued to trade higher and hit an intra-day high of $106.82 before starting to pull back again and forming support just underneath $102.

From a technical analysis standpoint, stocks that break out above a resistance area also tend to then form support at that area on a near-term pull back, which IBM has done. And if they do form support at the prior resistance area, then that is usually a bullish signal. Either the stock bounces back up again, or worse case scenario, we see a consolidation or sideways move.

We are recommending IBM at current levels on an expected bounce although traders should confirm that the market is not going to weaken further when trading resumes on Monday.

Word of caution, we would also like to point out that IBM had rallied past $105 and actually formed another support area there which held. Then the stock formed a double bottom, using $105 as a base, another bullish signal.

Now, as seen on Thursday, that area was violated and the stock also broke below its 50 day moving average. With that being the case, before initiating a long trade, we want to make sure IBM won’t continue pulling back and fall to its 100 day moving average around $99. So go long only if the market looks firm or is beginning to move to the upside.

A worse than expected jobs numbers from the Labor Department sent stocks crashing in trading Thursday, ahead of the long Independence Day Weekend.

Before the bell, the Labor Department reported that that the economy lost 467,000 non-farm jobs in the month of June, from a revised loss of 322,000 jobs in May. This was worse that the 365,000 that economists had been forecasting. The country’s unemployment rate now stands at 9.5% in June, from 9.4% in May.

On the news, the Dow Jones Industrial Average lost 223.32 points to close at 8,280.74, for a percentage loss of 2.63%, NASDAQ lost 49.20 points to close at 1,796.52, for a percentage loss of 2.67%, the S&P 500 lost 26.91 points to close at 896.42 for a 2.91% loss and the Russell 2000 was off 20.25 points to 497.21, for a 3.91% loss.

In other economic news, the Commerce Department reported that orders for manufactured goods rose 1.2% in May, from a downwardly revised 0.5% climb in April. Economists had been forecasting a reading of 0.9%, so the number was much better that expected, however, the market could not shake the jobs numbers.

In trading, all thirty stocks in the Dow Jones Industrial Average fell, with IBM (IBM) the worst loser on a dollar basis, after the stock dropped $3.11 to close at $101.73. It was followed by Chevron (CVX), which lost $2.10 to close at $64.42, Exxon Mobil (XOM), which lost $2.07 to close at $68.49, United Technologies (UTX), which dropped $2.04, to close at $50.24 and Travelers (TRV), which was off by $1.93 to $39.20.

Coca Cola (KO) and Cisco (CSCO) were the “best” performers, after both only lost $0.30 to close at $48.88 and $18.50 respectively.

In broader trading, some of the major losers among the S&P 500 stocks included Google (GOOG), which was off $10.50 to $408.49, Amazon (AMZN) lost $2.28 to $79.32, Prudential Financial (PRU) was off by $2.26 to $34.94, Sears Holding (SHLD) dropped $2.67 to $62.48 and Wynn Resorts (WYNN) finished the session down $1.98 to $33.41.

M&T Bank Corporation was the best performer in the S&P 500, climbing $1.24 to $52.40, followed by Varian Medical (VAR), which rose $0.54 to $33.50.

The U.S. economy lost 467,000 jobs in June, which was substantially worse than the 363,000 in jobs losses that economists were forecasting. The nation’s unemployment rate now stands at 9.5% from 9.4% in May, a 26-year high.

Since the recession started in December of 2007, the economy has lost 6.5 million jobs and in total, there are now 14.7 million unemployed Americans.

Auto parts supplier Lear Corporation (LEA) announced on Wednesday evening, that it will be filing for Chapter 11 bankruptcy protection. To that end, the company has secured $500 million from a group of lenders that include JP Morgan Chase (JPM) and Citigroup (C) that the company plans to use to fund operations while it is in bankruptcy.

The company also announced that it is in talks with its creditors to secure support for the bankruptcy plan.

In a statement, company CEO Bob Rossiter said, “We intend to complete the restructuring as quickly as possible and emerge as an even stronger and more competitive partner to our customers.”
According to the company, Lear will default on a $38 million interest payment that on its 8.5% senior notes due 2013 and its 8.75 percent senior notes due 2016.

The company’s operations outside the United States will not be included in the bankruptcy protection filing.

Shares of Oshkosh Corporation (OSK) rose $3.89 to $18.43, which was a gain of 26.75%, in regular session trading on Wednesday, after the Pentagon announced late Tuesday, that the company had won a contract to supply the military with the next generation of mine-resistant, ambush-protected vehicles, or MRAPs. The vehicles will be used by Army and Marine Corps ground troops in Afghanistan. Oshkosh beat out three other companies, Force Dynamics, BAE Systems and Navistar International. Under terms of the $1.06 billion contract, Oshkosh will provide 2,244 of the MRAPs, with the possibility that the contract could be expand to cover 5,000 vehicles worth almost $3 billion.

The stock market started the new month and the new quarter to the upside, although they closed off the highs of the day, with stocks gaining on positive jobs, housing and manufacturing numbers.

Before the markets opened, payroll-processing firm ADP (ADP) issued its ADP National Employment Report, which showed that the non-farm private sector lost 473,000 jobs in June, compared to a revised loss of 485,000 jobs losses in May.

With economists predicting a loss of 394,000, the actual number was greater than forecasts, which would usually be a negative for the markets. However, the number of jobs lost was the smallest since October 2008. Then, the private sector lost 352,000 jobs.

A report from the Institute for Supply Management, which showed that that organization’s manufacturing activity index rose to 44.8 in June from 42.8 in May, slightly better that forecasts of a rise to 44.6, helped fuel an early rise in the stock market.

Additionally, housing data released by the National Association of Realtors, showed that pending home sales climbed 0.1% to 90.7 in May, from an upwardly revised reading of 90.6 in April. Forecasters had been looking for a reading of 90.3, which would have been unchanged from the reading that was initially reported in April.

Tempering the positive housing and manufacturing numbers, was news from the Commerce Department that construction spending fell 0.9% in May, from a revised 0.6% gain in April. This was against forecasts calling for a decline of 0.6% against the 0.8% gain that was initially reported in April.

In trading, twenty-six out of the thirty stocks in the Dow Jones Industrial Average index rose, although only two Kraft Foods (KFT) $26.61 +$1.27 and Coca-Cola (KO) $49.18 +$1.19 rose more than a dollar. Moves to the downside where also capped, with JP Morgan Chase (JPM) the largest point loser, after dropping $0.34 to $33.77.

The Dow Jones Industrials closed at 8,504.06, up 57.06, a 0.68% gain, NASDAQ was up 10.68 points to 1,845.72, for 0.58%, the S&P 500 tacked on 4.01 points for 0.44% to close at 923.33 and the Russell 2000 ended the session at 517.46, up 9.18 points for 1.81%.

Shares of New Oriental Education And Technology Group (EDU), which provides private education in China, broke out of a base last week and the shares are currently forming an up-trend.

The stock seems to be heading to at least the $70 area in the near term, from yesterday’s close of $67.36, giving traders an opportunity for some quick profits. A three-point move to the upside would be a gain of 4.4% and option traders buying the calls on the stock would do even better. For option traders, we recommend buying the July $65 in the money calls, which are now asking $3.90

A report from the Conference Board, which showed that consumer confidence dropped in June, weighed on stocks on Tuesday. As results stocks finished the quarter by ending the day to the downside.

The Dow Jones Industrial Averaged lost 82.38 points, a 0.97% decline on the day, to close at 8,447.00, NASDAQ was off by 9.02 points, 0.49% decline, to finish the session at 1,835.04 and the S&P 500 shed 7.91 points 0.85% to close out June at 919.32.

According to the conference board’s report, consumer confidence fell to a reading of 49.3 in June, from May’s revised 54.8. Economists had been forecasting the index would show a reading of 55.3 for the month, from the 54.9 that was initially reported for May.

Traders also had to digest the Case-Shiller Home Price Index from Standard and Poor’s, which showed that home prices fell 0.6% from March to April and 18.1% year over year.

In trading, twenty-four out of the Dow thirty stocks finished lower and the index was led to the downside by construction equipment manufacturer Caterpillar (CAT), which lost $1.70 to $33.04, a decline of 4.89%.

It was helped by IBM (IBM) $104.42 -$1.41, Proctor and Gamble (PG) $51.10 - $1.13 and American Express (AXP) $23.24 -$0.76. The biggest point gainer in the Dow Jones Industrial Average on the day was McDonald’s (MCD), which could only manage a gain of $0.26, sending the stock to a close of $57.49.

In broader trader, online education provider Apollo Group (APOL) rose $5.13 to $71.12, a 7.77% gain, after the company reported that in the fiscal 2009 Q3 period, net income came in at $1.26 per share compared to the EPS of $0.85 that it earned in the same period a year ago. That was way ahead of the $1.12 that analysts had been looking for.

H&R Block (HRB) was also a big gainer, after the stock rallied $1.56 to $17.23 for a percentage gain of 9.95% on the company’s 2009 fourth quarter earnings news.
H&R Block reported earnings of $2.09 per share, versus the $1.66 the company earned in the same period a year ago. This was better than the $2.05 that analysts had been forecasting.

For the full year, the company reported that income from continuing operations for the fiscal year ended April 30, 2009, was up 15.0% to $513.1 million, or $1.53 on a per share basis. This compares to $445.9 million, or $1.36 per share for full fiscal year 2008.

The company also announced that it expects fiscal 2010 earnings to come in the range of $1.60 to $1.80 per share. Consensus estimates for the full fiscal 2010 now stand at $1.66 per share.

We are looking for some near-term weakening in shares of Apache Corporation (APA). They are currently trading at $72.53 (closing price on Monday June 29) and we like the July 75 puts here. Enter at current prices between $3.50 and $4.10.