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Stocks May Open Flat As Traders Digest Jobs Report - U.S. Commentary

wallstreet2 103112 05May17

With traders digesting the closely watched monthly jobs report, stocks may continue to show a lack of direction in early trading on Friday. The major index futures are currently pointing to a roughly flat open for the markets, with the Dow futures up by just 3 points.

Early trading is likely to be driven by reaction to a report from the Labor Department showing stronger than expected job growth in the month of April.

The report said non-farm payroll employment jumped by 211,000 jobs in April after climbing by a downwardly revised 79,000 jobs in March.

Economists had expected employment to increase by 185,000 jobs compared to the addition of 98,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate edged down to 4.4 percent in April from 4.5 percent in March. The unemployment rate had been expected to tick up to 4.6 percent.

The report also said the annual rate of growth in average hourly employee earnings slowed to 2.5 percent in April from 2.6 percent in March.

While the bigger than expected increase in employment paints a positive picture for the economy, the data will likely reinforce expectations of another interest rate hike by the Federal Reserve next month.

Traders may be reluctant to make significant moves later in the day as they look ahead to this weekend's presidential runoff in France.

Among individual stocks, Shares of Zynga (ZNGA) are moving sharply higher in pre-market trading after the online game developer reported better than expected first quarter revenues and provided upbeat guidance.

Biotechnology company ImmunoGen (IMGN) may also see early strength after reporting a narrower than expected first quarter loss on revenues that exceeded estimates.

Meanwhile, shares of IBM (IBM) may move to the downside after billionaire investor Warren Buffett told CNBC he has sold about a third of his shares in the company.

Extending the lackluster performance seen over the past several sessions, stocks showed a lack of direction throughout the trading day on Thursday. The major averages spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the session mixed. The Dow edged down 6.43 points or less than a tenth of a percent to 20,951.47, while the Nasdaq crept up 2.79 points or 0.1 percent to 6,075.34 and the S&P 500 inched up 1.39 points or 0.1 percent to 2,389.52.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. China's Shanghai Composite Index and Hong Kong's Hang Seng Index both slid by 0.8 percent. The Japanese markets remained closed for a holiday.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has edged down by 0.1 percent, the U.K.'s FTSE 100 Index is up by 0.1 percent and French CAC 40 Index is up by 0.4 percent.

In commodities trading, crude oil futures are slipping $0.12 to $45.40 a barrel after plunging $2.30 to $45.52 a barrel on Thursday. Meanwhile, after tumbling $19.90 to $1,228.60 an ounce in the previous session, gold futures are climbing $4.30 to $1,232.90 an ounce.

On the currency front, the U.S. dollar is trading at 112.45 yen compared to the 112.46 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0987 compared to yesterday's $1.0985.

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