Wall St set to slide at open on jobs data
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Fri, 05 Sep 2008 13:17:54 GMT |
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By Ellis MnyanduNEW YORK (Reuters) - Stocks headed for a lower open on Friday after a government report showed the U.S. labor market deteriorated further in August, pushing the unemployment rate to its highest in more than 4-1/2 years.The news of the unemployment rate climbing to 6.1 percent last month from 5.7 percent in July painted a bleak picture for the economy and the outlook for profit growth, and fueled a sell-off in Europe.Technology shares, including chip makers Qualcomm and Texas Instruments , were set to be among the top drags after Nokia , the world's biggest maker of mobile phones, slashed its third-quarter market share outlook.A broad slide on Wall Street will extend Thursday's rout that has put the broader market on the cusp of retesting its July 15 low."We are running job losses that are typically seen in the early stages of a economic recession. We are probably in one with the unemployment rate going up that much over the last year, and especially in a single month," said David Resler, chief economist at Nomura Securities in New York.S&P 500 futures fell 11.9 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 102 points and Nasdaq 100 futures lost 18.50 point.The bleak news on the economic front diminished the appetite for riskier assets like stocks, causing investors to run for the relative safety of government debt. Benchmark 10-year U.S. Treasury yields fell to their lowest in 4-1/2 months.Merrill Lynch will also be among the high-profile drags after Goldman Sachs cut the investment bank to a "sell" and said it will likely incur additional write-downs for soured mortgage investments. Merrill shares slid 5.4 percent to $24.80 before the bell.(Editing by Kenneth Barry)
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