Jobs Data Weigh Down U.S. Stocks

Regarding jobless claims, Mendelsohn said that investors will remain cautious as the unemployment number remains between 400,000 and 450,000. "If we get past 450,000 that would indicate the slowdown is really taking hold," he said.

Recent data, said Mendelsohn, leave investors uncertain about the economy's direction. "It's really been mixed, we've had good, we've had bad, it's really not conclusive." He said that exports have continued to bolster the economy, but a slowdown abroad may weaken exports in the future. Meanwhile, a slowdown in consumer spending continues to hinder the economy.

"The positive is ... those fundamentals are helping to create that drop in commodity prices," Mendelsohn said. "Eventually energy prices should come down to a level where the consumer feels comfortable and the economy can restart itself." He said that crude-oil prices need to dip into the $90-a-barrel range before the consumer feels an impact.

In company news, a slew of retailers reported same-store sales for August. Wal-Mart (WMT Quote) showed improved sales that beat estimates, while specialty retailers such as Wet Seal (WTSLA Quote), Gap (GPS Quote) and Limited (LTD Quote) reported declines in same-store sales.

Elsewhere, Bloomberg reported that Merrill Lynch (MER Quote) faces difficulties as it tries to sell parts of its loan portfolio to Korea Asset Management Corp.

Also dealing with hard-to-value assets, insurance giant AIG (AIG Quote) is considering forming a new company to get rid of its mortgage-related securities, according to a report in The New York Post.

Boeing (BA Quote) averted a strike by its largest union, the International Association of Machinists and Aerospace Workers. The union had voted to strike after negotiations for a new three-year contract failed, but federal mediators brokered a 48-hour postponement of the walkout.