Stock Futures Pare Gains After Data Deluge
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U.S. stock-index futures shed early gains on Thursday as traders parsed through a slew of economic data.
As of 9:08 a.m. ET, Dow Jones Industrial Average futures rose 19 points to 12400, S&P 500 futures climbed 1.9 points to 1311 and Nasdaq 100 futures rose 2.3 points to 2535.
It has been a rough month for Wall Street, with the Dow and S&P 500 on track to take the biggest loss on a percent basis since September 2011. In a sign of the anxiety, the yield on the U.S. 10-year Treasury fell to its lowest level on record on Wednesday.
Traders got a glimpse of how the world's biggest economy is faring on Thursday.
The private sector tacked on 133,000 jobs in May, according to payroll processor ADP, which came in slightly below the 148,000 economists forecast. That was a stronger gain than the 119,000 added in April.
The report "absolutely reinforces the idea that ... employment growth has decelerated of late, likely due to uncertainty over the path of economic growth in the United States in light of growing issues in Europe," Dan Greenhaus, chief global strategist at BTIG, wrote in an e-mail.
A separate report from the Labor Department showed new claims for unemployment benefits rose to 383,000 last week from an upwardly revised 373,000 the week prior. Claims were expected to remain unchanged at a previously reported 370,000. Meanwhile, the number of planned U.S. layoffs soared 53% in May from April to 61,887, according to Challenger, Gray & Christmas. It was the highest reading since September 2011.
"The single variable that matters most in our economy is employment," said Lawrence Creatura, a portfolio manager at Federated Investors, which manages $364 billion in assets. "If you fix that, you really fix everything."
However, Creatura warns that "the symptoms aren't good" leading up to the closely-watched monthly employment report on Friday.
Indeed, a second reading on U.S. gross domestic product from the Commerce Department showed the economy expanded at an annualized rate of 1.9% in the first quarter of 2012, in line with economists' estimates, but slower than an initial estimate of 2.2%. This represents a decrease from the 3% growth rate in the fourth quarter of 2011.
On the European front, Ireland was holding a referendum on the European Union fiscal pact that, if approved, will force every country in the eurozone currency bloc to meet universal spending and debt rules. Analysts said that while the results in Ireland were important, the pact itself is likely to come too late to have an immediate impact on the deepening debt crisis that has threatened to ensnare Spain, Europe's fourth-largest economy.
Commodities markets were mixed. The benchmark crude oil contract traded in New York rose 18 cents, or 0.2%, to $88 a barrel. Wholesale New York Harbor gasoline fell 0.3% to $2.85 a gallon.
In metals, gold rose 40 cents, or 0.06%, to $1,567 a troy ounce.
The Euro Stoxx 50 jumped 0.77% to 2133, the English FTSE 100 gained 0.84% to 5342 and the German DAX edged up by 0.41% to 6306.
In Asia, the Japanese Nikkei 225 sold of by 1.1% to 8543 and the Chinese Hang Seng dipped 0.32% to 18629.