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Stock Futures Fall After Disappointing Jobs Report

Friday, 04 Jun 2010 09:05 AM

The stock market is headed for a sharply lower open after the government's May employment fell far below investors' expectations.

Dow Jones industrial average futures are down 178 points.

The Labor Department reported Friday that 431,000 jobs were created last month, but 411,000 were from the government's hiring of temporary census workers. Economists polled by Thomson Reuters had forecast employers would add 513,000 jobs.

Hiring by private employers was particularly weak, which is raising concerns that the economic recovery remains slow.

The unemployment rate fell to 9.7 percent from 9.9 percent in April. That was slightly better than the 9.8 percent unemployment rate economists had forecast. That number, however, could creep higher again as more people try to find work and census workers lose their temporary jobs.

The monthly jobs report is considered one of the most important reports on the economic calendar. High unemployment remains one of the biggest obstacles to strong, sustained growth. Without people returning to the work force, consumer spending is expected to remain sluggish and limit future growth. Consumer spending accounts for the bulk of economic activity.

Dow futures tumbled 178, or 1.7 percent, to 10,080. Standard & Poor's 500 index futures fell 21.50, or 2 percent, to 1,082.10, while Nasdaq 100 index futures dropped 38.75, or 2 percent, at 1,859.00.

Futures were already down after concerns resurfaced about the health of European banks. The euro fell quickly to a new four-year low, which 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 $1.2019 before climbing back to $1.2041. 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.

Investors poured into safe-havens like U.S. Treasuries because of the weak employment report and faltering euro. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.26 percent from 3.37 percent late Thursday.

Overseas, Britain's FTSE 100 fell 0.4 percent, Germany's DAX index fell 0.1 percent, and France's CAC-40 dropped 2.2 percent. All three indexes had been trading higher earlier in the day.

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The stock market is headed for a sharply lower open after the government's May employment fell far below investors' expectations.Dow Jones industrial average futures are down 178 points.The Labor Department reported Friday that 431,000 jobs were created last month, but...
US,Wall,Street
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2010-05-04
Friday, 04 Jun 2010 09:05 AM
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