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Stocks seen lower ahead of payroll data


Stock index futures pointed to a lower open on Wall Street on Friday, with futures for the S&P 500, Dow Jones and Nasdaq 100 all down 0.7 percent at 5:18 a.m. EDT on fears the U.S. non-farm payrolls could be weaker than expected.

A weak reading of the payroll data, due at 8:30 a.m. EDT, could stoke concerns the United States is heading toward recession. The data is expected to show an increase of 75,000, according to a Reuters survey, slowing from July’ 117,000 rise.

Banks could be hit after the New York Times reported that the Federal Housing Finance Agency is filing a lawsuit against big lenders like Bank of America, JPMorgan Chase and Goldman Sachs. The suit relates to mortgages sold during the housing bubble and accuses the banks of failing to perform due diligence required under securities law and missed evidence that borrowers’ incomes were falsified or inflated.

Separately in the banking sector, the Wall Street Journal said, citing people familiar with the situation, that the Federal Reserve has asked Bank of America Corp to show what measures it could take if business conditions worsen.

U.S. securities regulators have requested proprietary algorithmic trading data from high-frequency trading firms as part of an investigation into suspicious market activity.

Merger and acquisition news could be another focus after people close to the matter said AT&T Inc is trying to salvage its planned $39 billion acquisition of smaller rival T-Mobile USA blocked by the U.S. government.

Independent refiner Valero Energy Corp said it would buy Murphy Oil Corp’ Meraux refinery for about $625 million.

The Wall Street Journal reported, citing people familiar with the matter, that U.S. drugmaker Eli Lilly & Co is in talks to form a partnership with, and potentially invest in, Turkish generic-drug company MN Pharmaceuticals.

Netflix Inc fell in after-hours trading following Starz Entertainment saying it would pull all of its movies and television shows from its streaming service early next year.

Earnings news could be in the spotlight, with fourth-quarter results expected from Campbell Soup, the world’ biggest soup maker.

European shares fell 1.8 percent in morning trade on Friday on U.S. non-farm payroll data fears, while Athens General lost 3.3 percent after Greece said on Thursday it will miss its budget deficit targets this year.

U.S. stocks snapped a four-day rally on Thursday on worries about the U.S. jobs report.

The Dow Jones industrial average .DJI fell 1 percent, the Standard & Poor’ 500 Index .SPX was down 1.2 percent and the Nasdaq Composite Index .IXIC was down 1.3 percent.

Source: Reuters