After moving mostly lower over the course of the four previous sessions, stocks are likely to regain some ground in early trading on Friday. The major index futures are currently pointing to a sharply higher open for the markets, with the Dow futures up by 130 points.
The markets are likely to benefit from the release of a report from the Labor Department showing stronger than expected U.S. job growth in the month of July.
The Labor Department said non-farm payroll employment increased by 163,000 jobs in July following a downwardly revised increase of 64,000 jobs in June.
Economists had expected employment to increase by about 100,000 jobs compared to the addition of 80,000 jobs originally reported for the previous month.
Despite the job growth, the unemployment rate edged up to 8.3 percent in July from 8.2 percent in June. The increase surprised economists, who had expected the unemployment rate to come in unchanged.
Peter Boockvar, managing director at Miller Tabak, said, "As measured by the payroll survey, the job creation in July was encouraging in light of the growing signs of economic slowdown but wasn't equally matched by the very volatile household survey which fell and was the main factor in the rise in the unemployment rate."
"In terms of impacting Fed policy, this data point will unlikely affect their desire to do more in September if the economy doesn't get any better from here," he added.
The monthly jobs report is likely to overshadow a report from the Institute for Supply Management on activity in the service sector in the month of July.
Economists expect the index of activity in the service sector to edge down to 52.0 in July from 52.1 in June, with a reading above 50 still indicating growth in the sector.
On the earnings front, food giant Kraft Foods (KFT) reported second quarter operating earnings of $0.68 per share on revenues of $13.3 billion. While the earnings exceeded estimates, the revenues trailed expectations.
Kraft said its first half results are on track with its previous guidance for 5 percent net revenue growth and at least 9 percent operating earnings growth on a constant currency basis.
Fellow Dow component Procter & Gamble (PG: Quote) also reported better than expected second quarter earnings on revenues that fell short of analyst estimates.
Stocks ended Thursday's trading mostly lower, extending the downward move seen over the course of the three previous sessions. A negative reaction to the latest headlines out of Europe contributed to the continued weakness on Wall Street.
The major averages climbed well off their worst levels going into the close but still ended the day in the red. The Dow fell 92.18 points or 0.7 percent to 12,878.88, the Nasdaq slipped 10.44 points or 0.4 percent to 2,909.77 and the S&P 500 dropped 10.14 points or 0.7 percent to 1,365.00.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. While Japan's Nikkei 225 Index tumbled by 1.1 percent, China's Shanghai Composite Index surged up by 1 percent.
Meanwhile, the major European markets have all shown strong moves back to the upside. The U.K.'s FTSE 100 Index has jumped by 1.5 percent, while the German DAX Index and the French CAC 40 Index have spiked up by 2.5 percent and 2.7 percent, respectively.
In commodities trading, crude oil futures are climbing $0.99 to $88.12 a barrel after falling $1.78 to $87.13 a barrel on Thursday. Gold futures are edging down $0.10 to $1,590.60 an ounce. In the previous session, the precious metal slid $16.60 to $1,590.70 an ounce.
On the currency front, the U.S. dollar is trading at 78.64 yen compared to the 78.24 yen it fetched at the close of trading on Thursday. Against the euro, the dollar is valued at $1.2247 compared to yesterday's $1.2180.
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by RTT Staff Writer
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