U.S. Stocks May Give Back Ground On Jobs Data, Disappointing Tech Earnings

After moving sharply higher over the past few sessions, stocks may give back ground in early trading on Friday. The major index futures are currently pointing to a notably lower open for the markets, with the S&P 500 futures down by 1.0 percent.

Renewed concerns about the outlook for interest rates may weigh on Wall Street following the release of much stronger than expected jobs data.

The Labor Department’s closely watched monthly jobs report said non-farm payroll employment soared by 517,000 jobs in January after surging by an upwardly revised 260,000 jobs in December.

Economists had expected employment to increase by 185,000 jobs compared to the addition of 223,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 3.4 percent in January from 3.5 percent in December. The dip surprised economists, who had expected the unemployment rate to inch up to 3.6 percent.

While the report points to continued strength in the labor market, the data may raise concerns the Federal Reserve will raise interest rates higher than currently anticipated.

The downward momentum on Wall Street also comes amid a negative reaction to earnings news from several big-name tech companies.

Shares of Amazon (AMZN) are plunging by 5.6 percent in pre-market trading after the online retail giant report better than expected fourth quarter revenues but provided disappointing guidance for the current quarter.

Google parent Alphabet (GOOGL) is also seeing significant pre-market weakness after reporting weaker than expected fourth quarter earnings.

Shares of Apple (AAPL) may also move to the downside after the tech giant reported fiscal first quarter results that missed analyst estimates on both the top and bottom lines.

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of January.

The ISM’s services PMI is expected to inch up to 50.3 in January from 49.6 in December, with a reading above 50 indicating growth in the sector.

Stocks moved mostly higher during trading on Thursday, extending the rally seen late in Wednesday’s session. Tech stocks helped lead the advance, resulting in a substantial increase by the Nasdaq.

The tech-heavy Nasdaq soared 384.50 points or 3.3 percent to a nearly five-month closing high of 12,200.82, while the S&P 500 jumped 60.55 points or 1.5 percent to 4,179.76, it’s best closing level in over five months.

Meanwhile, the narrower Dow spent most of the day in negative territory, with the blue chip index edging down 39.02 points or 0.1 percent to 34,053.94.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index fell by 0.7 percent.

The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.4 percent, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.5 percent.

In commodities trading, crude oil futures are slipping $0.36 to $75.52 a barrel after sliding $0.53 to $75.88 a barrel on Thursday. Meanwhile, after falling $12 to $1,930.80 an ounce in the previous session, gold futures are slumping $15.40 to $1,915.40 an ounce.

On the currency front, the U.S. dollar is trading at 129.80 yen versus the 128.68 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0851 compared to yesterday’s $1.0910.

Source: Read Full Article