Money continued to make an exit out of stocks but mostly moved to the sidelines ahead of tomorrow's big Jobs Report as bond traders wanted to keep their 'powder dry.' Our benchmark FNMA 6.0% mortgage bond ended with a loss of only 3bp to close at $101.62 after trading as much as 53bp lower on profit-taking. A 0.9% plunge in same-store sales by the large retail chain stores in October weighed on stock market investors as did a warning of lower sales in the current quarter by technology bellwether Cisco Systems and weak economic news. Initial Jobless Claims fell by 4,000 claims to 481,000 last week from an upwardly revised level of 485,000 claims from the prior week. The four-week moving average for claims increased to 477,000 from the prior week's average of 475,500. Preliminary Productivity rose in the 3rd Qtr. by 1.1% vs. the consensus of 1.0% as employers cut back on employees' working hours by 2.7%. This was the quickest cut in hours worked in six years leading to a greater than expected growth in productivity. Unit labor costs, a key measure of labor market generated inflation, rose by 3.6%, substantially greater than the -0.1% drop in the 2nd Qtr. The bond market didn't like the gain in Unit Labor costs. The Monster Employment Index measuring online job demand fell 10 points to 150 from 160 in October signaling further job losses. Online recruiting was sharply lower for retail, real estate, leisure and hospitality jobs. Inter-bank lending continues to improve with the three month dollar LIBOR falling to 2.51% from 2.71% yesterday. In response to the global economic and financial melt down, the Bank of England surprised everyone with a staggering 1.5% rate cut to drop their cash lending rate to 3.0%. The European Central Bank chipped in with a more modest 0.50% cut to lower its rate to 3.25% while the Swiss National Bank also cut its cash rate by 0.50% to 2%. The Czech Republic's central bank joined the rate cut party with a 0.75% cut to drop its key lending rate to 2.75%. These rate cuts should allow the U.S. dollar to at least temporarily gain some strength against these other country's currencies and should help lower oil prices. In fact, a report by the International Monetary Fund that it expects lower global economic growth of just 2.2% and oil prices of $68/barrel helped to weigh on oil prices today as crude fell $4.30/barrel to $61.00. The stock market fell sharply lower for the second consecutive day with the Dow dropping 443 points to close at 8,695 while the broader S&P 500 Index lost 47 points to finish at 904. The NASDAQ Composite Index fell 72 points to end at 1,608.