Oil companies fall as crude slides again; silver suffers flash crash
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U.S. stock futures struggled for direction on Friday, as investors took a cautious approach after a bond-fueled selloff and ahead of the key jobs report that could help determine the future path of Federal Reserve monetary policy.
Futures for the Dow Jones Industrial Average were down 11 points, or 0.1%, at 21,269.00, while those for the S&P 500 index edged up less than 1 point at 2,408.75. Futures for the Nasdaq-100 index were up 1 point to 5,597.00.
The Nasdaq Composite Index fell the most in Thursday's trade (http://www.marketwatch.com/story/us-stock-futures-pull-lower-as-investors-keep-searching-for-cues-2017-07-06), ending 1% lower as investors continued to rotate out of battered technology names. The S&P 500 index and Dow average fell 0.9% and 0.7%, respectively, as bonds dropped sharply, sending yields higher.
"The rising yields are a reaction to the shift in emphasis from central banks away from their long held view that advocates ultraloose monetary policy. However, can the data back this up?," said Richard Perry, market analyst at Hantec Markets, in a note.
"Today's U.S. employment situation report is crucial. Last month's nonfarm payrolls were a disappointment on headline jobs, but also average hourly earnings. Can this change this month? Markets tend to be cautious ahead of payrolls, with traders mindful of the potential volatility in response to the announcement," he added.
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The yield on 10-year U.S. Treasury notes rose 1 basis point on Friday to 2.378%, around its highest in eight weeks.
Economic docket: The top-tier jobs report is out at 8:30 a.m. Eastern Time and forecast to show 180,000 jobs were added to the economy in June, according to economists polled by MarketWatch (http://www.marketwatch.com/economy-politics/calendars/economic). The unemployment rate is forecast to remain at 4.3%. An upbeat reading on the labor market could further strengthen the case for the Federal Reserve to raise rates later this year and start unwinding its massive balance sheet, analysts say.
Read:U.S. forecast to add 180,000 jobs in June, but don't be surprised if hiring falls short (http://www.marketwatch.com/story/us-forecast-to-add-180000-jobs-in-june-but-dont-be-surprised-if-hiring-falls-short-2017-07-06)
The greenback was slightly higher ahead of the report, with the ICE Dollar Index up 0.1% at 95.916.
Also on the economic docket, the Fed will release its semiannual monetary policy report to Congress at 11 a.m. Eastern.
Another potentially significant event for markets on Friday, is the two-day G-20 leaders' gathering in Hamburg, Germany. U.S. President Donald Trump will meet with Russian counterpart Vladimir Putin for the first time since taking office, as well as Chinese President Xi Jinping.
"Watching how host Angela Merkel balances the demands of President Trump, especially after the speech he gave [in Warsaw] (http://www.marketwatch.com/story/trump-puts-to-rest-article-5-doubt-in-warsaw-speech-2017-07-06), and of President Putin, and of President Xi is likely to prove more compelling viewing for markets than the average summit -- especially given the background of central banks suddenly pulling the carpet out from under them all," said Michael Every, senior strategist at Rabobank, in a note.
As the leaders arrived on Thursday, police clashed with thousands of protesters (http://www.marketwatch.com/story/welcome-to-hell-protestors-police-clash-at-g-20-summit-2017-07-07) as around 12,000 people joined in a protest dubbed "Welcome to Hell."
Oil blues: In a volatile week for oil prices, crude oil slumped 2.6% on ongoing concerns (http://www.marketwatch.com/story/oil-prices-drop-1-volatile-session-2017-07-07) that production cuts led by the Organization of the Petroleum Exporting Countries aren't enough to balance the oil market.
Read:OPEC can't save oil market alone--the U.S. has to step in, says Morgan Stanley (http://www.marketwatch.com/story/opec-cant-save-oil-market-alonethe-us-has-to-step-in-says-morgan-stanley-2017-07-06)
Oil-related companies fell in premarket action on Friday. Shares of Transocean Ltd. (RIG) were down 1.1%, Apache Corp.(APA) lost 0.6% and Noble Energy Inc.(NBL) dropped 0.6%.
Stock movers: Shares of Qualcomm Inc.(QCOM) were down 0.6% ahead of the bell. The company on Thursday filed a complaint against Apple Inc (http://www.marketwatch.com/story/qualcomm-steps-up-fight-against-apple-2017-07-06-164853632).(AAPL) , saying the tech giant infringed several of Qualcomm's patents on wireless technology in iPhones and iPads.
Apple shares were off 0.1% premarket.
Other markets: Stocks in Asia closed mostly lower (http://www.marketwatch.com/story/asia-pacific-markets-slump-following-losses-in-us-europe-2017-07-06), while European stocks picked up where they ended on Thursday and continued lower.
Bond yields in Europe were relatively stable, with borrowing costs on German paper marginally lower at 0.565%.
Silver was down 1%, at $15.82 an ounce. The metal earlier in the session tanked to $14.34 in a flash crash that likely was due to a trading error. Gold traded 0.2% lower at $1,220.80 an ounce.
(END) Dow Jones Newswires
July 07, 2017 06:08 ET (10:08 GMT)