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Stocks set for weaker open
Jobless figures hit 6-year high; worse-than-expected
By Allen Wan, CBS.MarketWatch.com
Last Update: 8:48 AM ET Dec 7, 2001
NEW YORK (CBS.MW) - U.S. stocks are set for a weaker open Friday as data confirms that the economy remains at a vulnerable stage with people losing jobs at a faster-than-expected pace.
Ahead of the market open, the government released data showing that the unemployment rate rose to 5.7 percent in November, and that a larger-than-expected 331,000 jobs were lost that month. The jobless rate is at its highest since August 1995, when it also reached 5.7 percent. Economists expected the rate at 5.6 percent after a reading of 5.4 percent in October.
The figures support a Federal Reserve interest-rate cut next week, which if approved will be the 11th cut of the year.
Tech stocks lost their pre-market momentum.
December futures for the tech-laden Nasdaq 100 dropped 11.00 to 1,713, which was about 6 1/2-points below fair value, according to figures provided by HL Camp & Company. Ahead of the jobs data, they were over 7-points better than fair value. S&P 500 futures were down 4.50, or about 3 1/2-points below fair value, at 1,164.00.
The "triple Qs"(QQQ), a tracking stock for the Nasdaq 100 cash index ($NDX), treaded 26 cents lower to $42.65 over the Redibook ECN.
The Nasdaq, which has gained 6.4 percent so far this week, is hoping to latch on to evidence of improving business conditions for key companies.
After the market closed Thursday, Intel (INTC) boosted its fourth-quarter revenue target, saying demand for its microprocessors has been stronger than expected. Rival AMD (AMD) said it expects a narrower fourth-quarter loss than in the third quarter because of strong PC chip sales and cost cutting. Tech bellwether Sun Microsystems said it continues to generate new orders and said second fiscal-quarter sales should rise from the $2.9 billion the company reported the previous quarter. Read for trading after the closing bell.
Bonds take breather
In the bond market, treasury securities took a breather from straight sessions of losses on Friday, with participants widely expecting a weak monthly jobs report to confirm the Fed's 11th rate cut of the year is coming next week.
A benchmark 10-year note rose 7/32 at 100 4/32 to yield ($TNX) 4.98 percent or a drop of 3 basis points. And, a 30-year bond added 6/32 at 98 31/32 to yield ($TYX) 5.45 percent, down 1 basis point.
In overseas markets, the bears took hold in Asia and Europe. Tokyo's Nikkei sank on corporate bankruptcy worries as the economy was officially proclaimed to be in recession. More fallout from Enron and sliding oil stocks snapped three days of gains for the key European markets. and .
On the war front, the Taliban's supreme commander reportedly has decided to surrender the group's last stronghold in Kandahar, but a brokered deal could set up a confrontation with the United States.
On Thursday, the stock averages ended little changed, giving up earlier gains as investors took on some caution ahead of Friday's employment report and in the aftermath of two sessions of gargantuan gains.
The Dow ended with a modest loss as its retail components weakened while the Nasdaq carved out a gain but closed well off its session peak.
The Dow Jones Industrial Average ($INDU) shed 15.15 points, or 0.1 percent, to 10,099.14.
The Nasdaq Composite ($COMPQ) jumped 7.43 points, or 0.4 percent, to 2,054.27 while the Nasdaq 100 Index ($NDX) lost 2.94 points, or 0.2 percent, to 1,717.97. Check market stats and latest sector performance.
The Standard & Poor's 500 Index ($SPX) edged down 0.3 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks gained 0.6 percent. |
