Stock futures flat ahead of payrolls report
Wall Street equity futures were little changed on Friday, a day after U.S. stocks suffered their worst selloff since the middle of the financial crisis in early 2009 and ahead of the critical payrolls report.
The Dow and the S&P tumbled more than 4 percent and the Nasdaq lost 5 percent on Thursday on fears the United States was staring at another recession and that Europe's sovereign debt crisis would swallow two of its largest economies.
Investors braced for the key U.S. monthly non-farm payrolls as well as the unemployment rate, due at 8:30 a.m. EDT, seeking more insight on the extent of the weakness in the economy following a batch of dismal macroeconomic data.
Economists forecast payrolls rising by 85,000, according to a Reuters survey, after a tepid 18,000 jobs gain in June. The unemployment rate was expected to hold steady at 9.2 percent.
If you get a bad number that is just confirmation that the U.S. economy is slowing down, job growth is not there and we are becoming unstable from a growth perspective. It doesn't deal at all with the instability on the sovereign debt and liquidity part of the crisis that is developing, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
The chances of getting a real strong rally going here that is sustainable, even on a good number, is probably small and a bad number just contributes to the overall perspective that the dual crisis is accelerating. That's not good.
S&P 500 futures were off 0.3 point and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 34 points, and Nasdaq 100 futures shed 5.5 points.
The S&P 500's drop on Thursday put the benchmark index more than 10 percent below its April 29 high and into a correction.
Bank of America Corp was down 0.9 percent to $8.75 in premarket trade. The big U.S. bank said legal losses could cost another $2.3 billion to cover litigation tied to state and federal probes into home foreclosures and investor lawsuits over soured securities.
Procter & Gamble Co fell 0.9 percent to $59.33 after the personal care products maker gave a forecast that fell short of expectations as it reported higher quarterly earnings.
European shares fell 1.1 percent and hit 14-month lows on concerns about the pace of global economic recovery as banking shares bounced back following sharp losses earlier in the day.
Investors in Asia slashed positions in equities and commodities and scrambled for the safety of cash and government bonds. Some Asian stock markets fell by more than 5 percent.
(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)
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