U.S. Stock Futures Drift Lower Ahead of Payrolls Data
07/06/2012| 06:53am US/Eastern
By William L. Watts
U.S. stock-index futures drifted into negative territory Friday, losing ground as investors awaited June's nonfarm-payrolls report and other labor-market data on rising fears of a spreading global economic slowdown.
Futures on the Dow Jones Industrial Average recently fell 21 points to 12811. S&P 500 futures dropped two points to 1359, and Nasdaq 100 futures shed four points to 2638.
"All eyes [are] on today's nonfarm payrolls. Ahead of the number, indicators have been decidedly mixed, with ADP showing a healthy 176,000 [rise in private-sector payrolls] yesterday, but given the weakness of other data in recent weeks, it would be a little surprising for U.S. hiring to come through unscathed," said Rebecca O'Keefe, head of investment at Interactive Investors in London.
Economists surveyed by MarketWatch forecast a net gain of 100,000 jobs for the month, compared with 69,000 in May and 77,000 in April. The unemployment rate is expected to remain at 8.2%.
The Labor Department will release the unemployment report at 8:30 a.m. EDT.
Meanwhile, a round of monetary-policy easing Thursday by central banks in China, the euro zone and the U.K. did little to lift stocks or overall risk appetite. China's central bank and the European Central Bank both cut interest rates, while the Bank of England held rates steady but boosted the size of its quantitative-easing program.
Despite the added global stimulus, the Dow Jones Industrial Average ended 47.15 points lower Thursday at 12896.67. The Nasdaq Composite Index ended virtually flat, while the S&P 500 fell 6.44 points to end at 1367.58.
Strategists at Barclays said the stimulus moves had little impact because, aside from China's, they were widely anticipated.
In addition, U.S. economic data "suggest a firmer employment picture than is widely perceived as necessary for further Fed easing," they wrote. "Although the nonmanufacturing ISM [index] was soft, the employment component expanded in June. Jobless claims declined, and the ADP employment report noted a pickup in private-sector hiring," they noted.
European equities lost ground Friday, with the Stoxx 600 Europe index declining 0.3%.
Most Asian markets also declined. Strategists said the flood of central bank action the previous day served to highlight worries about the global economy.
Concerns about a slowing global economy were underlined Friday by International Monetary Fund Managing Director Christine Lagarde. In a Tokyo speech, she said the global economic outlook has grown more "worrisome" on signs of slowing growth not only in Europe and the U.S. but in key emerging markets, including Brazil, China and India.
Shares of Netflix Inc. were expected to be in focus after an upbeat Facebook post by Chief Executive Reed Hastings on Thursday.
Nymex crude-oil futures fell $1.52 to $85.70 a barrel in electronic trade. Gold futures lost $15.50 an ounce to $1593.90.
The dollar index, which measures the U.S. unit against a basket of six major rivals, rose 0.1% to 82.88. The euro fell 0.2% versus the dollar to $1.2370, while the U.S. currency fell 0.1% against the yen to trade at Y79.86.
Write to William L. Watts at AskNewswires@dowjones.com