Futures Drop Sharply After Negative Jobs Report


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U.S. stock futures turned sharply negative heading into Friday's trading session after a dismal November jobs report erased any positive momentum for the market.

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As of 9:10 a.m. in New York, the Dow Jones Industrial Average futures lost 63 points to 11300, the S&P 500 futures were down 7.2 points to 1215.50 and the Nasdaq 100 futures lost 14.75 points to 2172.25.

The Labor Department said the U.S. economy created only 39,000 non-farm jobs in November, far less than the creation of 140,000 jobs that economists had been looking for. Private sector hiring was 50,000 in the month, with government cutting about 11,000, according to the Bureau of Labor Statistics who handles the report.

The unemployment rate also unexpectedly rose by 0.2 percentage points to 9.8%

The November jobs report was significantly worse than what nearly all market observers had expected - the most bearish economist estimate was for a creation of 97,000 jobs in the month - and the report could add credence to the Federal Reserve's recently announced $600 billion quantitative easing strategy.

"[There is] no way to spin this one positively as all components were extremely negative for the jobs picture going forward," said Tom Di Galoma, head of fixed income trading at Guggenheim Securities, in an e-mail.

The report caused U.S. equities to immediately sell off, bonds to rise and the U.S. dollar to weaken further against its major currency pairs. The euro was no op 0.9% against the dollar.

U.S. markets will get two other economic reports this morning - October factory orders and the ISM non-manufacturing activity index - both at 10 a.m. ET.

In commodities, oil was down 0.35% to $87.70 a troy ounce and gold was now up 0.4% to $1,394.70 a troy ounce.

Global Markets

The U.K.'s FTSE 100 fell 0.42% following the U.S. jobs report to 5743.22, France's CAC 40 was down 0.19% to 3740.05 and Germany's DAX lost 0.33% to 6934.53.

In Asia, Tokyo's Nikkei 225 lost 0.1% to 10178.30, Hong Kong's Hang Seng fell 0.55% to 23320.50 and China's Shanghai Composite lost 0.04% to 2842.43.

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