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Stocks May See Early Weakness On Disappointing Jobs Data - U.S. Commentary

Stocks may move modestly lower at the start of trading on Friday following the release of a disappointing jobs report. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 38 points.

The downward momentum for the markets comes following the release of a report from the Labor Department showing much weaker than expected job growth in the month of April.

The report showed that employment increased by 115,000 jobs in April following an upwardly revised increase of 154,000 jobs in March. Economists had expected an increase of about 165,000 jobs compared to the addition of 120,000 jobs originally reported for the previous month.

While the Labor Department also said that the unemployment rate edged down to 8.1 percent in April from 8.2 percent in March, the drop was largely due to a decrease in the size of the labor force.

Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, the muted market response to the weak headline number was due to the offset from the upward revisions in the two prior months, leading to an in line figure taken together."

"This said and as I've been saying, the data isn't strong enough to get excited and not weak enough to get the Fed to think they need to do more right now, a no man's land that will keep a lid on stocks for the time being," he added.

Meanwhile, Kraft (KFT) may be in focus after the food giant reported better than expected first quarter results. The company also reaffirmed its full-year guidance and said it is on track with plans to split into two companies by the end of the year.

Shares of LinkedIn (LNKD) may see early strength after the online professional network operator reported first quarter results that exceeded analyst estimates and provided upbeat guidance.

In other news, Facebook set the price range for its initial public offering at $28 to $35 per share. The social networking giant expects the much anticipated IPO to raise up to $13.6 billion and give the company a market value as high as $96 billion.

With traders reacting negatively to a mixed batch of U.S. economic data, stocks moved mostly lower during trading on Thursday. Caution ahead of the monthly jobs report also contributed to some risk aversion on Wall Street.

The major averages climbed off their worst levels going into the close but still ended the day firmly in the red. The Dow fell 61.98 points or 0.5 percent to 13,206.59, the Nasdaq dropped 35.55 points or 1.2 percent to 3,024.30 and the S&P 500 slid 10.74 points or 0.8 percent to 1,391.57.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday, although the Japanese markets remained closed. Australia's All Ordinaries Index and Hong Kong's Hang Seng Index both ended the day down by 0.8 percent.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.9 percent, the French CAC 40 Index and the German DAX Index are both down by 0.7 percent.

In commodities trading, crude oil futures are sliding $1.57 to $100.97 a barrel after falling $2.68 to $ 102.54 a barrel on Thursday. Meanwhile, gold futures are climbing $4.20 to $1,639 an ounce. In the previous session, gold dropped $19.20 to $1,634.80.

On the currency front, the U.S. dollar is trading at 80.20 yen compared to the 80.18 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3145 compared to yesterday's $1.3153.

by RTT Staff Writer

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