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Stocks May Open Lower Despite Upbeat Jobs Data - U.S. Commentary


Stocks may extend a recent move to the downside in early trading on Friday despite the release of upbeat jobs data. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 97 points.

The downward momentum on Wall Street comes even though the Labor Department released a report showing stronger than expected job growth in the month of August.

The Labor Department said non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

The data may have raised concerns about the outlook for interest rates, as the report also showed the annual rate of average hourly employee earnings growth accelerated to 2.9 percent in August from 2.7 percent in July.

Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9 percent in August compared to expectations for a drop to 3.8 percent.

Lingering trade concerns may also weigh on the markets following the expiration of a public comment period on new U.S. tariffs on $200 billion worth of Chinese goods.

Traders are likely to keep a close on the President Donald Trump and his administration for news regarding the implementation of the proposed tariffs.

Adding to the worries about, Trump reportedly told a columnist for the Wall Street Journal he is "still bothered by the terms of U.S. trade with Japan."

Stocks moved mostly lower over the course of the trading day on Thursday, extending the decline seen over the two previous sessions. The Nasdaq posted another significant loss, although the Dow once again managed to close in positive territory.

While the Dow inched up 20.88 points or 0.1 percent to 25,995.87, the Nasdaq slumped 72.45 points or 0.9 percent to 7,922.73 and the S&P 500 fell 10.55 points or 0.4 percent at 2,878.05.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index slid by 0.8 percent, while Hong Kong's Hang Seng Index closed just below the unchanged line.

The major European markets have also moved to the downside on the day. While the U.K.'s FTSE 100 Index has slumped by 1 percent, the German DAX Index and the French CAC 40 Index are down by 0.2 percent and 0.1 percent, respectively.

In commodities trading, crude oil futures are slipping $0.13 to $67.64 a barrel after tumbling $0.95 to $67.77 a barrel on Thursday. Meanwhile, after rising $3 to $1,204.30 an ounce in the previous session, gold futures are falling $2.50 to $1,201.80 an ounce.

On the currency front, the U.S. dollar is trading at 110.96 yen compared to the 110.75 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1587 compared to yesterday's $1.1623.

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