With the monthly jobs report coming in much weaker than expected, stocks are likely to see another sell-off at the start of trading on Friday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 188 points.
The substantial 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 May.
The report showed that non-farm payroll employment rose by 69,000 jobs in May following a downwardly revised increase of 77,000 jobs in April. Economists had been expecting an increase of about 150,000 jobs compared to the addition of 115,000 jobs originally reported for the previous month.
Additionally, the Labor Department said that the unemployment rate unexpectedly edged up to 8.2 percent in May from 8.1 percent in April, marking the first increase since last June.
Peter Boockvar, managing director at Miller Tabak, said, "Bottom line, weak is the word and whether weather give back or not (Nov. thru Mar. avg. 211k job gains), the economy has [clearly] lost steam in a variety of data points."
The disappointing jobs report largely overshadowed a separate report from the Commerce Department showing a 0.2 percent increase in personal income in April and a 0.3 percent increase in personal spending.
Not long after the open, the Institute for Supply Management is scheduled to release its monthly report on national manufacturing activity. The index of activity in the sector is expected to edge down to 54.0 in May from 54.8 in April.
The Commerce Department is also scheduled to release its monthly report on construction spending, with spending expected to increase by 0.5 percent in April.
While stocks moved sharply lower in early trading on Thursday, the markets staged a notable recovery attempt over the course of the session. Selling pressure re-emerged in late-day trading, however, resulting in a lower close.
The major averages all ended the day in the red but well off their worst levels of the day. The Dow edged down 26.41 points or 0.2 percent to 12,393.45, the Nasdaq fell 10.02 points or 0.4 percent to 2,827.34 and the S&P 500 slipped 2.99 points or 0.2 percent to 1,310.33.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.2 percent, while Hong Kong's Hang Seng Index ended the day down by 0.4 percent.
The major European markets have also come under considerable selling pressure. While the U.K.'s FTSE 100 Index has fallen by 1.5 percent, the French CAC 40 Index and the German DAX Index have plummeted by 2.6 percent and 3.7 percent, respectively.
In commodities trading, crude oil futures are plunging $8.63 to $82.90 a barrel after falling $1.29 to $86.53 a barrel on Thursday. Meanwhile, gold futures, which edged down $1.50 to $1,564.20 an ounce in the previous session, are climbing $20.10 to $1,584.30 an ounce.
On the currency front, the U.S. dollar is trading at 78.07 yen compared to the 78.31 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2322 compared to yesterday's $1.2367.
by RTT Staff Writer
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