U.S. Stock Futures Drift Lower Ahead of Payrolls Data
First Published Friday, 6th July 2012 11:05 am - © 2012 Dow Jones
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
HOT STOCKS TO WATCH
Among the companies with shares expected to actively trade in Friday's session are Informatica Corp. (INFA), Xyratex Ltd. (XRTX) and Seagate Technology PLC (STX).
Software company Informatica said its second-quarter earnings and revenue will miss its earlier expectations, saying it didn't adapt as rapidly as it should have to the changing macroeconomic environment, especially in Europe. Shares slumped 26% to $32.10 after hours.
Xyratex swung to a fiscal second-quarter profit as the storage-systems provider continued to improve its margins, even as revenue in the core enterprise data-storage segment declined. Shares jumped 7.5% to $12.60 after hours.
Hard-disk driver maker Seagate Technology Inc. (STX) cut its revenue and gross margin expectations for its recently ended fiscal fourth quarter, hurt by quality issues at a supplier and by a faster-than-anticipated recovery in the hard-disk drive market. Seagate shares fell 3% to $24.32 after hours while rival Western Digital Corp's (WDC) shares slipped 1.3% to $30.28.
LeapFrog Enterprises Inc.'s (LF) chief financial officer, Mark A. Etnyre, has resigned to spend more time with his family, the toy maker said Thursday. Shares slipped 3.3% to $11 after hours.
Alexza Pharmaceuticals Inc. (ALXA) said Thursday the U.S. Food and Drug Administration has accepted its resubmitted new drug application for Adasuve, a schizophrenic and bipolar disorder treatment, and has set a goal date of Dec. 21.
Bazaarvoice Inc. (BV) revised its earnings and revenue outlook for its fiscal first quarter and the full year to reflect the marketing-software company's recently completed acquisition of rival PowerReviews Inc.
Broadcom Corp. (BRCM) and Emulex Corp. (ELX) reached a partial settlement over their patent litigation, with Emulex agreeing to pay Broadcom $58 million in cash for certain networking technology licenses.
Standard & Poor's Ratings Services lowered its outlook on Walter Energy Inc.'s (WLT, WLT.T) junk-level credit ratings to negative from stable on expectations that the coal miner will post weaker-than-expected profits.
Vornado Realty Trust (VNO) confirmed it would acquire a retail condominium at 666 Fifth Ave. in New York City for approximately $707 million, expanding its portfolio of elite Manhattan street retail.
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