Stock Futures Under Pressure; All Eyes on Employment Report
FOX Business: The Power to Prosper
U.S. stock futures were solidly in the red as traders reacted to downbeat corporate news and developments on the euro zone debt crisis and awaited the key monthly employment report.
As of 7:30 a.m. ET, Dow Jones Industrial Average futures slumped 74 points to 11,392, S&P 500 futures dipped 8.8 points to 1,193 and Nasdaq 100 futures fell 16 points to 2,201.
A slew of economic data released over the last several weeks have pointed to a slowing global economic recovery, and have potentially even foreshadowed a double-dip recession according to some economists. The labor market has been a major point of weakness, adding considerably fewer jobs every month than is the norm for a robust economic recovery.
The monthly employment report from the Labor Department -- which is slated for release at 8:30 a.m. ET -- is considered to be one of the pivotal reports in gauging the strength of the economy and often has a strong market impact.
The consensus estimate among economists is for the unemployment rate to stick at 9.1%, as the economy adds 75,000 jobs. The forecast has been revised lower repeatedly as negative data have darkened the view over the last several weeks.
On the corporate front, The Federal Housing Finance Agency is set to sue more than a dozen big banks, such as Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS), for allegedly misrepresenting the quality of certain mortgage-based assets during the period leading up to the financial crisis, according to a report by The New York Times. Mortgage-backed securities, and banks' role in creating and marketing them, have been a major point of controversy among regulators for their role in the financial crisis.
The euro zone debt crisis has been a lingering concern on Wall Street amid concerns financial problems on that side of the Atlantic may bleed over to the U.S. banking system.
Greece will miss its deficit cutting target in 2011 as the economic recession has deepened there. The Mediterranean country needs an enormous rescue package from European authorities to avoid a costly default on its sovereign debt, and its commitment to deficit reduction is a major determinant of the bailout package.
Energy markets followed equities into the red. The U.S. dollar fell 0.1% against a basket of world currencies, while the euro was essentially unchanged against the greenback.
Light, sweet crude fell $1.05, or 1.2%, to $87.89 a barrel. Wholesale gasoline dipped 3 cents, or 0.99%, to $2.86 a gallon.
Gold, which has been particularly volatile in the last several sessions, jumped $33.10, or 1.8%, to $1,862 a troy ounce.
The English FTSE 100 fell 1.7% to 5,326, the French CAC 40 tumbled 2.5% to 3,184 and the German DAX slumped 2.9% to 5,566.
In Asia, the Japanese Nikkei 225 dipped 1.2% to 8,951 and the Chinese Hang Seng sunk 1.8% to 20,213.