Evergreen Solar, Ford Join Stocks Under $10 Watch List

In running TheStreet.com Stocks Under $10 service, we regularly take a look at the market with a specific focus on how it affects our sector. We wanted to do that today and to alert you that two new companies have been moved onto our Watch List for possible addition to the Stocks Under $10 model portfolio. (Much of this article was sent earlier to our subscribers. If you would like to see all our alerts and stock picks, click here for a free trial.)

First, let's examine the market. Following Friday's job data, which showed the fourth straight monthly decline in nonfarm payrolls, the major indices have been quietly trending lower. This may come as a surprise to some investors because the job number handily beat economists' forecasts and could indicate that the downturn in the U.S. economy may be close to easing.

Looking at other economic data from the past week, we saw an Institute of Supply Management (ISM) manufacturing number that was in line with expectations, while the nonmanufacturing number beat estimates. Both were taken as positives by the market, although manufacturing still showed contraction, and nonmanufacturing was barely above the 50 threshold (a reading above 50 indicates expansion, while a reading below 50 indicates contraction).

We agree with the bulls that the current wave of data suggest that while the U.S. economy is sluggish, it is not headed for a deep recession. But the equity market appears to be painting a much brighter picture. For example, despite a prolonged housing slump, a credit crisis that many have been calling the bottom for six months now; record energy prices and a credit market that has severely tightened, the S&P 500 is down only 4% on the year and down 10% from its all-time high.