Stock futures head lower to open 3rd quarter notes Oppenheimer Lloyds Global Markets CEO, Hiroyuka Maruyama
Oppenheimer Lloyds Global Markets CEO, Hiroyuka Maruyama noted Thursday stocks are set to lose ground for the second straight day after receiving another sobering message about weakness in the jobs market.
- (1888PressRelease) July 02, 2010 - Futures fell Thursday after the Labor Department said initial jobless claims rose unexpectedly last week to a seasonally adjusted 472,000. Economists polled by Thomson Reuters had forecast claims would fall to 452,000.
Oppenheimer Lloyds Global Markets CEO, Hiroyuka Maruyama added, "The disappointing news on weekly claims comes a day before the Labor Department's big monthly employment report. And, it comes just a day after Payroll Company ADP said private employers didn't ramp up hiring as much as expected last month."
"Initial claims have remained well above the levels economists believe would indicate strong jobs growth. Employers are still nervous about the pace of a recovery, something that has concerned investors in recent months as well."
Oppenheimer Lloyds Global Markets CEO, Hiroyuka Maruyama continued, "Those uncertainties have also trickled into the broader public. Consumer sentiment fell last month and spending has remained sluggish as people remain uneasy about their financial positions. High unemployment is considered the biggest obstacle to sustained growth that investors were hoping to see when they bid up stocks early this year."
Ahead of the opening bell, Dow Jones industrial average futures fell 12, or 0.1 percent, to 9,704. Standard & Poor's 500 index futures fell 2.00, or 0.2 percent, to 1,024.60, while Nasdaq 100 index futures dropped 4.25, or 0.2 percent, to 1,733.75.
The labor market remains a key focus, but traders will also get news Thursday from the housing and manufacturing markets. Two reports on the housing market are expected to show that sector remains weak just like the jobs market, particularly now that a home buyer tax credit has expired.
Economists predict construction spending fell by 0.8 percent in May, the first month after the tax credit ended. A separate reading is expected to show pending home sales fell sharply in May as well. The National Association of Realtors' pending home sales index likely fell to 98.4 in May from 110.9 in April.
The one area of the economy that has shown signs of life throughout the year is manufacturing. The Institute for Supply Management's manufacturing index likely dipped in June, but still signaled growth in the sector. Economists expect the index fell to 59 from 59.7 in May. Any reading above 50 signals expansion.
Still, growth in manufacturing has not been enough to overcome the ongoing problems in the jobs and housing markets. The pace of recovery in recent months has fallen short of what investors had hoped, which has helped drive stocks sharply lower.
The disappointing report from ADP Wednesday sent stocks tumbling on the final day of a dreadful second quarter. The Dow plummeted 10 percent in the second quarter, while the S&P 500 fell 11.9 percent.
With the market so unsettled, investors are giving up potential big gains in stocks and opting for the smaller, but safer gains that can be made in bonds. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 2.94 percent compared with late Wednesday. Its yield fell below 3 percent this week for the first time in more than a year, a sign bond investors do not trust a strong recovery is coming anytime soon.
Overseas, Britain's FTSE 100 dropped 1.4 percent, Germany's DAX index fell 1 percent, and France's CAC-40 fell 1.9 percent. Japan's Nikkei stock average fell 2 percent.
Stocks are set to lose ground for the second straight day after receiving another sobering message about weakness in the jobs market.
Futures fell Thursday after the Labor Department said initial jobless claims rose unexpectedly last week to a seasonally adjusted 472,000. Economists polled by Thomson Reuters had forecast claims would fall to 452,000.
The disappointing news on weekly claims comes a day before the Labor Department's big monthly employment report. And, it comes just a day after Payroll Company ADP said private employers didn't ramp up hiring as much as expected last month.
Initial claims have remained well above the levels economists believe would indicate strong jobs growth. Employers are still nervous about the pace of a recovery, something that has concerned investors in recent months as well.
Those uncertainties have also trickled into the broader public. Consumer sentiment fell last month and spending has remained sluggish as people remain uneasy about their financial positions. High unemployment is considered the biggest obstacle to sustained growth that investors were hoping to see when they bid up stocks early this year.
Ahead of the opening bell, Dow Jones industrial average futures fell 12, or 0.1 percent, to 9,704. Standard & Poor's 500 index futures fell 2.00, or 0.2 percent, to 1,024.60, while Nasdaq 100 index futures dropped 4.25, or 0.2 percent, to 1,733.75.
The labor market remains a key focus, but traders will also get news Thursday from the housing and manufacturing markets. Two reports on the housing market are expected to show that sector remains weak just like the jobs market, particularly now that a home buyer tax credit has expired.
Economists predict construction spending fell by 0.8 percent in May, the first month after the tax credit ended. A separate reading is expected to show pending home sales fell sharply in May as well. The National Association of Realtors' pending home sales index likely fell to 98.4 in May from 110.9 in April.
The one area of the economy that has shown signs of life throughout the year is manufacturing. The Institute for Supply Management's manufacturing index likely dipped in June, but still signaled growth in the sector. Economists expect the index fell to 59 from 59.7 in May. Any reading above 50 signals expansion.
Still, growth in manufacturing has not been enough to overcome the ongoing problems in the jobs and housing markets. The pace of recovery in recent months has fallen short of what investors had hoped, which has helped drive stocks sharply lower.
The disappointing report from ADP Wednesday sent stocks tumbling on the final day of a dreadful second quarter. The Dow plummeted 10 percent in the second quarter, while the S&P 500 fell 11.9 percent.
With the market so unsettled, investors are giving up potential big gains in stocks and opting for the smaller, but safer gains that can be made in bonds. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 2.94 percent compared with late Wednesday. Its yield fell below 3 percent this week for the first time in more than a year, a sign bond investors do not trust a strong recovery is coming anytime soon.
Overseas, Britain's FTSE 100 dropped 1.4 percent, Germany's DAX index fell 1 percent, and France's CAC-40 fell 1.9 percent. Japan's Nikkei stock average fell 2 percent.
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