Stocks Yin to Bonds' Yang

Macroeconomic Advisers takes a larger sample, more frequently, and now breaks down the results by size of company payroll and by goods-producing or service sector. The goods-producing sector showed a 43,000 decline in new jobs, while the services sector revealed a 100,000 increase. The manufacturing industry itself showed a 29,000 loss.

RBC Capital markets' Marta says traders declined to trade on the report, but it "got traders ready for a sub-100,000 print." Analysts predict 95,000 new jobs in February.

The bond market may take a weak jobs report as more grist for the recessionary mill. The stock market may take it harder.

In this environment of shrinking liquidity, or at least the threat of shrinking liquidity, "the employment numbers become more critical," says Hyman. "That's what has been holding up the consumer spending patterns," a notion reinforced Wednesday by strong quarterly results from diverse retailers such as Saks (SKS Quote), Chico's FAS (CHS Quote) and Payless ShoeSource (PSS Quote).

However, "if you combine a slowing economy with job destruction and the housing market worries, then the slowing economic growth multiplies and you can have a 'one plus one equals three' story" in terms of the negatives adding up, Hyman says.

The Fed's beige book was mostly more of the same, though some attribute a slightly softer depiction of growth as part and parcel of the stock market's turn downward Wednesday afternoon. "Several Districts noted some slowing," read part of the first sentence. It also said "lending activity remained mostly unchanged."