Today we got news that the ISM Services Index plunged in January for the first time in almost five years.

The Institute for Supply Management reported that its index of service sector business activity declined to 44.6 in January from a revised reading of 54.4 in December. Economists surveyed by Thomson Financial/IFR had expected a slight slowdown but had still had expected growth, with a median estimate for the index of 53.

It was the first time the service sector reading has contracted since March 2003. A reading above 50 indicates expansion, while below 50 indicates contraction.

The ISM's manufacturing index helped intensify fears of a recession last month when it fell below 50 for December, to 48.4, before rebounding on Friday to 50.7 for January.

This is more evidence that the economy is in rough shape. That's why stock-picking remains crucial. This is not one of those markets where a rising tide lifts all boats.