BLBG: U.S. Index Futures, European Stocks Fluctuate Before Job Report
U.S. index futures and European stocks swung between gains and losses as a rally in commodity producers offset concern a report today will show the economy lost more jobs in February than at any time since 1949.
Barrick Gold Corp., the world’s biggest gold producer, Alcoa Inc. and BHP Billiton Ltd. advanced at least 2 percent in Europe on higher metals prices. Marvell Technology Group Ltd. jumped 4.7 percent after announcing plans to cut 850 jobs. General Motors Corp. dropped 2.3 percent after saying costs to cut its Swedish Saab Automobile unit loose may exceed $1 billion.
Futures on the Standard & Poor’s 500 Index expiring this month added 0.1 percent to 687 at 10:14 a.m. in London after the index closed at the lowest level since September 1996. Dow Jones Industrial Average futures slipped 0.2 percent to 6,621 and Nasdaq-100 Index futures lost 0.3 percent to 1,080. Europe’s Dow Jones Stoxx 600 Index advanced less than 0.1 percent.
“ We’ve had brutal slump over last two days and markets have collapsed massively since the start of the year, which may lead to some recovery today,” said Andreas Nigg, who helps oversee about $39 billion as a fund manager at Vontobel Asset Management in Zurich. “The payrolls and unemployment numbers will be strongly in focus to see whether the negative trends will flatten somewhat.”
U.S. stocks sank yesterday after Moody’s Investors Service said it cut JPMorgan Chase & Co.’s credit rating and China quelled speculation the government will add to its stimulus plan. The S&P 500 is headed for its fourth straight weekly decline as the worsening recession, a third government rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan have helped drag the measure down 24 percent this year.
Worsening Recession
More than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The Dow average has fallen 20 percent since Inauguration Day, the fastest drop under a new president in at least 90 years, as investors speculated Barack Obama’s stimulus measures won’t revive the economy anytime soon.
Barrick added 2 percent to $29.41 in Germany as gold climbed for a second day in Asia.
Alcoa, the biggest U.S. aluminum producer, rose 4 percent to $5.47, while Freeport-McMoRan Copper & Gold Inc. increased 1 percent to $31.96. BHP, the world’s largest mining company, climbed 5.1 percent to 1,163 pence. Copper, nickel and tin all rose on the London Metal Exchange.
Marvell, GM
Marvell Technology rallied 4.7 percent to $7.87. The maker of chips for mobile phones said it will cut about 15 percent of its workforce and reported earnings excluding some items of 5 cents a share, more than double the average analyst estimate.
GM declined 2.3 percent to $1.80. The largest U.S. automaker said it may lose more than $1 billion separating from Saab, which filed for bankruptcy protection last month. GM has said it will only support Saab until Jan. 1, while Sweden’s government has said it won’t provide any aid to Saab until a long-term owner has been found.
Employers probably cut payrolls by 650,000 in February, a plunge that may force further reductions in spending and send more Americans into bankruptcy, economists said before a report scheduled for 8:30 a.m. in Washington. The jobless rate rose to a 25-year high of 7.9 percent, according to the median estimate in a Bloomberg survey.
