By Greg Peel

The Dow closed down 10 points or 0.1% while the S&P lost 0.3% to 1402 but the Nasdaq gained 0.3%.

The eurozone's April manufacturing PMI was released last night and it showed a fall to 45.9 from 47.7 in March, to the lowest level since mid-2009. At least it's still better than Australia's 43.9.

Eurozone unemployment data were also released last night, and they are of heightened importance ahead of this weekend's run-off election in France and the first round of voting in Greece, where support for the incumbent euro-centric coalition is dwindling. Net unemployment across the 17-member bloc has risen to 10.9% to mark the highest level in the history of the common zone. Unemployment in Greece is running at 21.7%.

And that's not actually as bad as Spain's level of 24.1%. The counter is Germany, albeit at 6.8% German unemployment is also slowly ticking up. Germany is the world's biggest exporter of manufactured goods and the country's individual manufacturing PMI read 46.2 in April, a 33-month low.

Wall Street continues to toy with post-GFC highs and the VIX volatility index remains inside the complacency zone at 16, while talk on the floors is of whether the next euro-dump is just around the corner. The timing is certainly right (May). Take note that put option protection for portfolios is currently very cheap, including in Australia.

The US economy wasn't doing Wall Street any favours last night either, with the ADP private sector numbers showing only 119,000 jobs were added in April. It's the lowest level since September, and well below the 200,000 per month average of the March quarter. It is also not enough to imply any reduction in the unemployment rate.

Meanwhile US factory orders fell by the sharpest amount in three years in March at 1.5%, reversing February's 1.1% gain.

All of the above had the Dow dropping sharply from the bell to be down 87 in the first hour, but then, of course, the shock absorber kicked in. What do you get if you add heightened fear from Europe with a slowing US economy? It's as easy as Q-E-3.

On Tuesday night the Dow was up 125 on the strong US manufacturing PMI, only to fall back to close up 65 given the diminished chance of QE3. Last night the down was down 87 on the jobs number, only to rally to a close of down 10 on the heightened chance of QE3. Sell in May and go away? I'd just go away.

There is, of course, an element of "where else could I put my money?" After three years of sitting in cash, fund managers just want to get on with it. They can't invest in Europe, emerging markets are slowing, Australia's economy is so bad it just needed a shock and awe rate cut, and so all one is left with, on a lesser of the evils basis, is the world's most indebted nation which is about to careen towards a potentially damaging election race of its own.

The US dollar rose 0.4% to 79.14 on such a concept while the US ten-year bond yield fell back again to 1.92%. Gold lost US$8.40 to US$1654.00/oz on the dollar's move while the Aussie was steady at US$1.0335.

Commodities also reacted to the US dollar' gain, and to what can only be called signs of global weakness. Base metals all fell 1-2%, Brent crude lost US$1.46 to US$118.20/bbl and West Texas was down US75c to US$105.41/bbl.

The SPI Overnight was up 3 points.

Tonight the ECB will hold a monetary policy meeting and in light of recent data may well reconsider its 1% cash rate, perhaps noting Glenn Stevens' axe. A eurozone rate cut might provide some comfort but that can only be at the margin if the tenuous bonds of austerity are shattered through further changes in member government.

Today begins the global round of service sector PMIs which is of significant importance to the 75% service-based US economy, while in Australia the highlight will be Westpac's ((WBC)) interim result release (just released).

Rudi will appear on Sky Business at noon and again on Switzer TV between 7-8pm today. Tomorrow he'll participate in BRR Media's Friday Afternoon Round Table.

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