The major U.S. index futures are pointing to a lower opening on Friday, with futures turning lower following the release of the jobs report for October, which showed a spike in the jobless rate above the 10% level to a 26-year high. At the same time, job losses, though slowing down from the previous month's pace, did not slowdown by as much as the economists had expected. The report is likely to lead to some selling in the markets following yesterday's sharp rally.
U.S. stocks staged a substantial rally on Thursday, encouraged by positive data related to the job market and productivity. After moving sharply higher at the open and climbing further in early trading, buying interest waned, resulting in a gradual climb in the major averages for the rest of the session. The Dow Industrials rose 203.82 points or 2.08%, moving back above the 10,000 level to settle at 10,006.
The S&P 500 Index rose 20.13 points or 1.92% to 1,067 and the Nasdaq Composite Index advanced 49.8% or 2.42% to 2,105.
All thirty of the Dow components ended the session higher, with American Express (AXP) (up 4.95%), Alcoa (AA) (up 3.04%), Boeing (BA) (up 3.54%), Caterpillar (CAT) (up 3.15%), DuPont (DD) (up 3.76%) and JP Morgan Chase (JPM) (up 3.93%) among the notable advancers in the session.
Among the sector indexes, the Dow Jones Transportation Average, the NYSE Arca Airline Index, the NYSE Arca Biotechnology Index, the NYSE Arca Securities Broker/Dealer Index, the Philadelphia Oil Service Index, the Philadelphia Housing Sector Index, the Philadelphia Semiconductor Index and the Dow Jones U.S. Basic Materials Average all advanced over 2%. The KBW Bank Index ended up about 3%.
On the economic front, the Labor Department reported that initial claims for unemployment benefits fell to 512,000 in the week ended October 31st from 532,00 in the previous week, with the recent week's reading marking the lowest since the first week of January. Continuing claims also declined by 68,000 in the week ended October 24th. However, emergency unemployment and extended benefits continued to rise.
Productivity in the non-farm business sector rose at an annualized quarterly rate of 9.5% in the third quarter, according to a preliminary report released by the Labor Department. The productivity growth trumped the 6.5% consensus growth estimate of analysts by a wide margin. Unit labor costs fell 5.2%.
Currency, Commodity Futures
Crude oil futures are trading down $0.66 at $78.96 after receding $0.78 to $79.62 a barrel on Thursday. Gold futures are currently rising $7 to $1,096.30 an ounce. In the previous session, the precious metal climbed $2 to $1,089.30 an ounce.
On the currency front, the U.S. dollar is trading at 90.156 yen compared to the 90.7128 yen it fetched at the close of New York trading on Thursday. The dollar is currently valued at $1.4856 versus the euro.
Asia
The Asian markets latched onto the positive lead from Wall Street and ended higher across the board.
Japan's Nikkei 225 average opened sharply higher and moved sideways in the morning before giving back some of its gains to close up 71.91 points or 0.74% at 9,789.
Technology exporters advanced strongly in the session, while utility, electric machinery, resource, pharma and financial stocks declined. Bank stocks took a hit after reports suggested that financial regulators in major countries would tighten capital adequacy rules for internationally active lenders. Auto stocks closed mixed.
On the economic front, the Japanese leading index rose to 86.4 in September from 83.2 in August, according to a preliminary report from Cabinet Office. The leading index improved for the seventh consecutive month and stood above expected reading of 86.2. At the same time, the coincident index stood at 92.5, up from 91.2 in August, with the reading coming in line with economists' expectations. The preliminary estimate showed that the lagging index climbed 0.3 points to 84.5 in September.
Australia's All Ordinaries index opened higher and saw a sharp spike in early trading, before pulling back slightly till the first hour of trading. Thereafter, the index moved steadily higher to close up 85.20 points or 1.89% at 4,604. The market witnessed broad based buying interest, with energy, financial and material stocks advancing sharply in the session.
The buoyancy was supported by positive commentary on growth by the Reserve Bank of Australia. In its quarterly Monetary Policy Statement, the central bank raised its GDP growth forecast for 2009 to 1.75% from its previous estimate of 0.5% growth. The RBA also upwardly revised its 2010 GDP growth forecast to 3.25% from 2.25%.
Europe
The major European averages opened lower and experienced volatility in early trading. The indexes have dipped into negative territory and are currently trading lower. While the French CAC 40 Index and the German DAX Index are moving down 0.55% and 0.86%, respectively, while the U.K.'s FTSE 100 Index is advancing 0.20%.
In corporate news, British Airways reported a loss of 208 million pounds for the six months ended September compared to a loss of 42 million pounds in the year-ago period. On a pre-tax basis, the airline reported a loss of 292 million pounds, reversing from a profit of 52 million pounds.
On the economic data, U.K'.s output prices climbed 1.7% year-over-year in October, much bigger than the 0.4% growth seen in September, the Office for National Statistics reported. However, the annual growth rate was smaller than the 1.9% increase expected by economists. On a monthly basis, the output price index rose 0.2% in October, mainly reflecting higher prices for electrical products, transport equipment, alcohol and tobacco and petroleum products. At the same time, the input price index edged up 0.1% compared to the previous year, reversing the 6.2% drop in September.
Meanwhile, the French Customs Office reported that the nation's trade deficit declined to 1.75 billion euros in September from 2.17 billion euros in August. Economists had expected a deficit of 3 billion euros. Exports rose at a faster rate of 2.25% to 29.11 billion euros compared to a 0.69% increase in imports to 30.86 billion euros.
U.S. Economic News
Treasury Secretary Timothy Geithner is due to attend the G20 finance ministers meeting in St Andrews, Scotland.
The Labor Department's monthly non-farm payroll report showed that the U.S. economy lost 190,000 jobs in October, a slowdown from the 219,000 reduction in non-farm payrolls in September. September's job losses were originally estimated as 263,000. Economists had expected the economy to lose 175,000 jobs in October.
The continued decrease in jobs reflected declines in employment in both the good-producing and service-providing sectors. While goods-producing sectors lost 129,000 jobs, service-providing sectors lost 61,000 jobs, a slower pace of decline than the 105,000 rate in the previous month.
At the same time, the unemployment rate surged to 10.2% in October from 9.8% in September. The rate came in much higher than the 9.9% rate expected by economists. Average hourly earnings rose 0.27% to $18.72.
The Commerce Department is due to release its wholesale inventories report at 10 AM ET. Economists expect wholesale inventories at the end of September to show a 1% decline.
Wholesale inventories fell by 1.3% month-over-month in August, a bigger decline than the 1% drop expected by economists. However, wholesale sales rose 1%, pushing the inventory to sales ratio down to 1.20 from 1.23 in the year-ago period.
The U.S. Federal Reserve is expected to release its monthly consumer credit report at 3 PM ET. Consumer credit for September is likely to show a decline of $10 billion.
Consumer credit fell for the seventh straight month in August, dropping by $12 billion, a bigger drop than the $10 billion decline expected by economists. Revolving debt fell by $9.91 billion and non-revolving credit, tied to auto loans, declined by $2.07 billion.
Federal Reserve Board Gov. Elizabeth Duke is scheduled to deliver the keynote address to the Chicago Fed's 5th annual Community Bankers Symposium at 3 pm ET.
Stocks in Focus
Starwood Hotels & Resorts (HOT) may be in focus after it said it has priced its offering of $250 million of 7.150% senior notes due 2019 at a price of 97.559% of principal amount.
Public Storage (PSA) is likely to see activity after it reported third quarter funds from operations of $1.44 per share, higher than the consensus estimate of $1.25 per share. On an adjusted basis, the company's adjusted funds from operations were $1.30 per share. Revenues rose 4% to $412.9 million.
Fluor Corp. (FLR) is likely to see buying interest after it said it received three new contracts from the U.S. Army Corp. of Engineers to provide life support services for its personnel and other clients in Iraq. The contracts are valued at $80 million and the scopes of work for all three contracts are expected to be completed by the end of third quarter.
Crocs (CROX) is likely to see weakness after it said it expects a fourth quarter loss of 15-20 cents per share compared to the 16 cents per share loss expected by analysts. The company also announced third quarter earnings of 1 cent per share compared to a loss of 8 cents per share expected by analysts. Revenues rose 2% to $177.1 million, ahead of the $156.4 million consensus estimate.
CBS Corp. (CBS) traded lower in Thursday's after hours session despite reporting adjusted earnings of 25 cents per share for its third quarter, ahead of the 22 cents per share consensus estimate. Revenues fell slightly to $3.35 billion, also beating the analysts' estimate of $3.20 billion. Activision Blizzard (ATVI) could also be in focus after it reported third quarter earnings of 1 cent per share compared to a loss of 8 cents per share last year. The company's adjusted earnings were 4 cents per share on a 1.1% decline in revenues to $703 million. Excluding deferred revenue, revenues were $755 million, below the mean analysts' estimate of $724 million.
Starbucks (SBUX) may gain ground after it reported that its third quarter adjusted earnings rose to 24 cents per share from 10 cents per share in the year-ago period. However, sales fell to $2.4 billion from the year-ago's $2.515 billion. Analysts estimated earnings of 21 cents per share on revenues of $239 billion. For 2010, the company expects non-GAAP earnings growth of 15%-20% and revenue growth in the low to mid-single digits.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.