BY Dennis Hobein:

Contributor, Stock Traders Daily

Real Time Trading Reports:  Included are detailed trading reports designed to help investors realize opportunities in these companies.  The reports are linked to the stock symbols in the article below.

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(La Jolla, CA)  On Jan. 8, the unemployment rate and non-farm payrolls numbers will be released before the market opens. The Street is currently expecting the unemployment rate to remain unchanged at 10% with payrolls dropping by 35,000. The market’s anticipation -- as well as the relevance -- regarding this economic data is high. A break below the 10% psychological number would be viewed as perhaps the most compelling evidence yet that the economy is in the midst of a meaningful recovery.

Market participants have already seen improving corporate earnings coupled with more positive outlooks and guidance. Auto sales, retail sales, and even the housing market have shown signs of life. However, although the rate of payroll declines has dropped for nine consecutive months, jobs are still being shed. Until jobs are being added, a complete recovery cannot occur.  With the importance of these numbers in mind, we wanted to take a look at a few stocks that could see increased volatility leading up to, and following, the data release. As always, we strongly recommend reviewing our free trading reports on these stocks before entering a trade position. They offer invaluable risk control tools that help to capture upside potential, while also mitigating the downside risks by providing entry/exit levels.

Recruiting Service Companies In Play

Obviously, an improving job market is going to have a positive impact on job placement and recruiting service companies. Two of the market leaders in this area are Monster Worldwide (NYSE: MWW) and Manpower (NYSE: MAN). Both of these stocks have put in solid gains this week, each up about 7%, which provides an indication that the market is feeling bullish about the upcoming jobs data. A positive sign for these stocks specifically as that they spiked higher immediately following the release of jobs data in December and November. Should the unemployment number dip below that 10% level, shares of MWW and MAN should pop to new 52-week highs. However, keep in mind that MWW has overhead resistance at the $20 area and MAN could hit resistance at the $60 level. For a more detailed technical analysis, please view our free trading reports by clicking on the ticker symbols.

Hotels, Airlines Other Areas Worth Watching

As the labor market improves, hotels and airlines should be clear beneficiaries as well. Going hand-in-hand with that observation is the idea that travel bookings companies, such as Priceline.com (Nasdaq: PCLN) and Expedia.com (Nasdaq: EXPE), should see increased business activity. Shares of PCLN (+275%) and EXPE (+80%) have been on a tear since early October of 2008. Hotel and airline stocks have not fared nearly as well, however. Marriot (NYSE: MAR), for example, has gone to the $28 level from $25, and Southwest Airlines (NYSE: LUV) is actually down to $11.50 from the $12 area. Given that these stocks have relatively underperformed, there may be a long opportunity here in 2010. Analysts are currently projecting MAR’s 2010 earnings to be essentially flat with 2009 at $0.87/share, but estimates could be revised upward if the job market continues to improve. The earnings outlook looks much better for LUV, with analysts projecting EPS growth of 200%. Keep in mind, though, that rising oil prices can put a serious hamper on LUV’s profits, and may be a cause for estimates to be reduced.

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