Layoff announcements hit their lowest level since March 2008 last month, signaling market stabilization. Global outplacement consulting firm Challenger, Gray & Christmas Inc. put the number of cuts at 66,404 for September, a 13% decline from July's 76,456. Year-over-year, the number of layoffs announced is down 30%, and September was the fourth month in a row in which job cuts fell relative to the same month a year earlier.

Planned job cuts reached 240,233 for the third quarter of 2009, according to Challenger, its lowest level since the first quarter of 2008, when there were 200,656 planned layoffs. For the third quarter of this year, job cuts fell 24.5% from the previous quarter's 318,165, and it's off 16.3% from 287,142 in the third quarter of 2009. At the beginning of 2009, the planned layoff rate reached a seven-year high of 578,510. Since then, the planned layoff rate fell 58.5%.

The Goodyear Tire & Rubber Company (NYSE: GT) is having a good day. Shares of Goodyear are up almost 8% in afternoon trading. Volume looks healthy, too. The company may have reported a loss for the second quarter, but since expectations were soundly beat, the market saw fit to bid shares higher (and I'm sure a fair amount of traders who short the stock were forced to cover).

According to Reuters, Goodyear said it lost, on an adjusted basis, 35 cents per share. That compares to expectations for a loss of double that amount.

The short interest in Ford (NYSE: F), rose 11.3 million shares to 283.1 million. The numbers compare shares sold short on April 30 in contrast to the number on April 15. Ford is now the most shorted company listed on the NYSE.

Ford has made a big deal about its turnaround. Some investors are buying the story. Ford's shares are up 20% this year.

But short sellers have a case, and it's a powerful one. Ford's US sales are still down by double digits most months. Sales of its most profitable cars and trucks, including its flagship F-150 pick-up, are dropping sharply, probably because of the rising cost of gas.

Ford's case is that it can continue to cut costs in the US and that its international sales are good. It is an argument that does not hold water. Ford has about 15% of the domestic market. How far can that fall? US sales need to support the company's factory and management costs on top of product development and design.

Ford can't count on all of those dollars coming from overseas.

Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.