Stocks Ignore Citi's Woes

In the first economic report of a busy week, the Institute for Supply Management said its manufacturing index for September fell to a reading of 52.0. That was down from 52.9 in August, and was a slightly greater decline than expected.

Later this week, the economic docket will bring the ISM services index, jobless claims, factory orders and the ever-important nonfarm payrolls report.

Paul Nolte, director of investments with Hinsdale Associates, said that because last month's jobs report was so weak, investors will be watching the number for September very closely "for signs that we are either entering or on the cusp of a recession. For many, two consecutive months of a decline in nonfarm payrolls is a sure indication of recession."

Nolte adds that the report should either provide fuel for further rate cuts by the Federal Reserve or signal that the central bank was premature in cutting by a bigger-than-expected 50 basis points last month. "Either way, we are looking forward to an interesting week," he said.

Marc Pado, U.S. market strategist with Cantor Fitzgerald, agreed that the focus of the week will be on the employment data, and he believes economists are a bit apprehensive to be too bullish about jobs.

"Given the solid weekly claims numbers, we would be hoping for a positive revision to August," he said.