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Stock-index futures pointed to a lower start for Wall Street equities on Friday as investors weighed a March employment report that showed job losses that were far steeper than expected, a reminder of the scale of the economic devastation from COVID-19.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, -0.42% fell 71 points, or 0.3%, to 21,202, while S&P 500 futures ES00, -0.27% declined 5 points, or 0.2%, to 2,511. Nasdaq-100 futures NQ00, -0.37% lost 24 points to 7,603, also down 0.3%.
The Dow DJIA, +2.24% Thursday closed up 469.93 points, or 2.2%, at 21,413.44, in choppy trading. The S&P 500 SPX, +2.28% ended 56.40 points, or 2.28%, higher at 2,526.90, while the Nasdaq Composite Index COMP, +1.72% gained 126.73 points, or 1.72%, to close at 7,487.31.
What’s driving the market?
The March jobs report showed that 701,000 Americans lost their jobs in March, blowing away assumptions that the impact of the coronavirus shutdowns would not be felt for another month. It was the first decline in payrolls since September 2010 and not far from the worst month of job losses during the 2008-2009 financial crisis.
The unemployment rate rose to 4.4% as employers just began to cut payrolls ahead of social distancing practices that shut down large swaths of the U.S. economy in order to stop the virus’s spread.
The report fails to capture the full damage from the virus because the Bureau of Labor Statistics used as its reference period the week ending March 12, which came just as the nation began its near shutdown.
See: Why Friday’s job report won’t tell the full story of an economy in crisis
Stocks on Thursday shook off more timely weekly data on jobless claims, which showed the number of first-time applications soared by a previously 6.6 million.
And stock futures pared losses Friday after the jobs data. Markets had sold off hard as a “vertical down” in the economy was being priced in, economist David Rosenberg told MarketWatch. “Now the issue is less about the depth and more about the duration. Indeed, investors believe there is a V coming with the stimulus kicking into gear in coming weeks.”
Oil futures rose further overnight with Saudi Arabia, Russia and other major producers set to debate production cuts of at least 6 million barrels a day on Monday, The Wall Street Journal reported. Oil surged around 25% on Thursday, lifting shares of beaten-down energy companies after President Donald Trump said Saudi Arabia and Russia were set to curb production, ending a devastating price war that sent the U.S. crude benchmark CL.1, +10.62% to an 18-year low as oil dropped by more than 60% in the first quarter.
The IHS Markit U.S. services purchasing managers index for March is due at 9:45 a.m. Eastern, with the Institute for Supply Management’s nonmanufacturing index set for release at 10 a.m. Eastern.
In Europe Friday the IHS Markit Composite Purchasing Managers’ Index fell from 51.6 in February to 29.7 in March, the lowest level since the survey started in 1998, meaning euro-zone GDP could already be falling at an annualized rate of nearly 10%.
Which companies are in focus?
Shares of Citrix Systems Inc. CTXS, +2.43% edged down in pre-market action despite a price target increase from Raymond James.
Bloomin’ Brands Inc. BLMN, -1.96% executives will forego salaries in an attempt to manage cash flow, the company said Friday. Bloomin’, whose brands include Outback Steakhouse, has seen shares lose nearly 70% of their value over the past year.
lululemon athletica inc. LULU, +1.08% shares ticked down in pre-market action after the company said late Thursday that it would continue to pay sales employees through June 1, whether or not stores re-open.
Twitter Inc. TWTR, -1.29% shares rose before the bell on Friday after a Goldman Sachs upgrade.
How are other markets trading?
Government bond yields extended their drop, with the yield on the 10-year U.S. Treasury TMUBMUSD10Y, +2.12% down 3.5 basis points to 0.592%.
Oil markets rebounded on hopes that production would soon be reined in, with the price of a barrel of West Texas Intermediate crude oil for May delivery CLK20, +10.62% up more than 7% to $27.25 a barrel on the New York Mercantile Exchange.
In precious metals, gold GCJ20, -0.04% for June delivery rose to $1,641.80 an ounce on Comex.
The U.S. dollar DXY, +0.55% continued its climb, rising 0.5% against a basket of its major trading partners, according to the ICE U.S. Dollar index.
European stocks were mixed, with the Stoxx Europe 600 index SXXP, -0.52% 0.4% lower and the FTSE 100 FTSE, +0.64% 0.5% higher.
