Stocks Set to Open Lower After January Employment Data

U.S. stocks were set to open lower on Friday after a government report showed the economy added 193,000 jobs in January, fewer than expected.

As reported by Reuters

 

NEW YORK (Reuters) - U.S. stocks were set to open lower on Friday after a government report showed the economy added 193,000 jobs in January, fewer than expected.

However, December payrolls were revised upward to 140,000 jobs from 108,000 earlier. The unemployment rate fell to 4.7 percent last month, the lowest level since July 2001, from 4.9 percent in December.

Economists polled by Reuters expected payrolls to rise by 240,000.

Standard & Poor's 500 index futures were down 0.10 point, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Nasdaq 100 index futures were down 3 points, and Dow Jones industrial average futures were down 6 points.

"This figure is significantly lower than had been anticipated - a lot of people were factoring in 250,000 to 300,000 jobs," said Stanley Nabi, vice chairman at Silvercrest Asset Management Group. "What we see here is a labor market that is getting tighter by the minute."

On Tuesday, the Federal Reserve lifted the benchmark rate to 4.50 percent and hinted more rate hikes might be needed.

"Those who said the Fed has only one or no more increases coming are going to revise their opinions," Nabi added. "The Fed is not finished. It probably has one or two more increases from here."

On the corporate front, appliance maker Maytag Corp. (NYSE:MYG - news), which is being bought by Whirlpool Corp. (NYSE:WHR - news), reported on Friday a larger fourth-quarter loss, as charges and weakness in sales of vacuums offset higher sales of major appliances.

Investors may focus on Amazon.com Inc. (Nasdaq:AMZN - news). Amazon shares tumbled in extended trading hours on Thursday after the online retailer said net profit fell in its critical fourth quarter, which includes the holiday selling season.

Other economic indicators on Friday include reports on factory orders and durable goods at 10 a.m. and the University of Michigan consumer sentiment index at 9:45 a.m

 

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