Stock futures fell Friday after the euro sank to a new four-year low. The big move comes ahead of the U.S. government's release of its key monthly employment report.
Futures had been trading in a narrow range as investors avoided making any big bets before the jobs report, which is expected to show a big jump in hiring last month. However, after concerns resurfaced about the health of European banks, the euro fell quickly to a new four-year low. The drop in the euro helped push U.S. stock futures and major European indexes lower.
The euro, which is used by 16 countries in Europe, fell as low as $1.2039 before climbing back to $1.2059. The euro has become an indicator for investors' confidence in Europe's economy. European and U.S. stocks have often mirrored moves in the euro over the past month.
Investors are concerned that mounting debt problems in countries such as Greece, Spain and Portugal will upend an economic recovery on the continent and slow a rebound globally.
Dow Jones industrial average futures fell 78, or 0.8 percent, to 10,180. Standard & Poor's 500 index futures fell 9.50, or 0.9 percent, to 1,094.10, while Nasdaq 100 index futures dropped 19.75, or 1 percent, to 1,878.00.
The big move comes ahead of the U.S. Labor Department's monthly report on employment. Typically, there is little movement in futures the morning of the jobs report.
Traders want to see if employers further ramped up their hiring last month as the domestic economy continues to recover. Economists expect employers added more workers than any month since September 1983, but those numbers were probably inflated by temporary government jobs tied to the census.
The unemployment rate likely dipped to 9.8 percent in May from 9.9 percent a month earlier, according to economists polled by Thomson Reuters. However, that number could creep higher again in the coming months as more people try to find work as the economy slowly improves.
Economists forecast the country added 513,000 jobs last month, a big jump from the 290,000 in April. But as many as 400,000 of those jobs could come from government hiring of census workers.
That temporary hiring means traders will likely look beyond the headline number to see how many jobs private employers added during the month. A report from payroll company ADP on Thursday said private companies added 55,000 jobs in May.
Because of the influx of temporary workers, economists forecasts for job growth vary widely. Among those polled by Thomson Reuters, predictions range from 175,000 jobs added last month to as many as 750,000.
The Labor Department's monthly employment report, which is due out at 8:30 a.m. EDT, is considered the biggest economic indicators on the calendar each month because unemployment is one of the biggest obstacles to a strong, sustained recovery.
More people working, even temporarily, means consumer spending will likely rise in the coming months. Consumer spending is the primary driver of economic activity in the country.
U.S. Treasury prices rose as investors sought safety of government bonds. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.35 percent from 3.37 percent late Thursday.
Gold pared its losses as investors moved into safe-haven investments. Oil prices retreated.
Overseas, Britain's FTSE 100 fell 0.4 percent, Germany's DAX index fell 0.1 percent, and France's CAC-40 dropped 1.2 percent. All three indexes had been trading higher earlier in the day.
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