WSJ: U.S. Stock Futures Extend Losses After Jobs Report
U.S. stock futures extended their losses, Treasury bonds dropped and the dollar jumped after the government reported a larger-than-expected pickup in hiring in May.
S&P 500 futures fell seven points, or 0.3%, to 2092 shortly after the 8:30 a.m. ET report. E-mini Dow futures lost 60 points, or 0.3%, to 17866. E-mini Nasdaq-100 futures shed 16 points, or 0.4%, to 4481.
Treasury prices fell after the report, lifting the yield on the 10-year Treasury note rising to 2.411% from 2.309% on Thursday.
The dollar gained against the yen and euro immediately after the data was released, hitting a new 12-year high against the yen at ¥125.70
The Labor Department said 280,000 jobs were added in May and the unemployment rate ticked up slightly to 5.5% from April’s 5.4%. Economists expected 225,000 new jobs were added last month and the unemployment rate would remain unchanged.
Investors are closely tracking the monthly jobs report for clues on the pace of economic growth and the course of interest-rate increases by the Federal Reserve. Several economic indicators have shown the U.S. economy stumbled in the first quarter. On Thursday, the International Monetary Fund cut its forecasts for U.S. growth and called for the Federal Reserve to hold off on its first rate increase until 2016.
Also Thursday, Fed Gov. Daniel Tarullo said the economy appears to have “lost some momentum.”
Carlton Neel, who manages about $1 billion as a portfolio manager for Zweig Advisers, said he expects stocks to end the year higher, driven by earnings. Still, he expects a smaller gain than in 2014.
“Earnings growth only happens when we have economic growth,” said Mr. Neel. He said he has been encouraged by signs of consumers spending on big-ticket items, such as cars and houses, and likes consumer discretionary stocks in this environment.
After a rocky week, stocks are on track for losses, with the Dow down 0.6% on the week.
European stocks declined, with Germany’s DAX and France’s CAC-40 both slipping about 1.5%. Greek stocks were hit hard after the government decided to bundle its loan repayments to the IMF this month into one payment at the end of June. Greece’s main stock index lost 5.1%.
In commodity markets, gold futures lost 0.2% to $1172.40 an ounce. Crude-oil futures added 0.6% to $58.35 a barrel.
