By Saumya Vaishampayan
U.S. stock futures rose Friday ahead of data expected to show
another month of strong job gains.
Dow Jones Industrial Average futures added 27 points, or 0.2%,
to 17917. S&P 500 futures rose two points, or 0.1%, to 2074,
and Nasdaq-100 futures gained five points, or 0.1%, to 4319.
Changes in stock futures don't always accurately predict moves in
the stock market after the opening bell.
Economic data this week haven't prompted major moves in stocks,
with investors attributing the reason to the focus on November's
jobs report. The Labor Department is expected to report that
payrolls rose by 230,000 and the jobless rate remained at 5.8%,
according to economists surveyed by The Wall Street Journal.
While the details in the report, such as wage growth, are more
important than the headline number, the latter is likely to prompt
the initial market reaction, said Jack Caffrey, portfolio manager
at J.P. Morgan Private Bank. A sharply stronger-than-expected
number of jobs created could lead investors to bet the Federal
Reserve will raise interest rates sooner than currently
expected.
"Too good a piece of news is actually not helpful, because it
takes away your friendly Fed," he said. "A really bad number makes
you question your earnings estimates," he said.
Stocks inched lower Thursday, snapping a two-day winning streak.
The Dow lost 0.1% to 17900.10 and the S&P 500 declined 0.1% to
2071.92.
Many investors say the backdrop for stocks remains positive.
Stocks have hit a series of records in recent weeks as data have
confirmed the U.S. economy and corporate earnings are both growing.
In fact, the U.S. is on track to post its strongest year of job
growth since 1999. Easing efforts by major central banks will
maintain pressure on already-low global interest rates, making
stocks appear more attractive than other assets.
Stocks can continue to gain even when the Fed begins to raise
short-term interest rates, partly because the increases are
expected to be gradual, said J.P. Morgan Private Bank's Mr.
Caffrey. A pullback in stocks would come if inflation starts to
pick up to a point that concerns the Fed, resulting in bigger
interest-rate increases, he said.
Friday's positive tone for stocks was sparked by gains in
Europe, where stocks and bonds climbed. The Stoxx Europe 600 rose
1.2%.
Crude-oil futures fell 0.5% to $66.51 a barrel. Gold futures
lost 0.2% to $1204.80 an ounce.
The yield on the 10-year Treasury note rose to 2.264% from
2.256%.
In corporate news, Dollar Tree Inc. said its pending $8.5
billion acquisition of Family Dollar Stores Inc. could close as
early as February. Dollar Tree said it would have to shed a small
number of stores for antitrust approval of the deal. Shares of both
companies were inactive in premarket trade.
Amazon.com Inc. is getting into the diaper business in a move
that pits itself against Procter & Gamble Co. Amazon will sell
diapers and wipes through a brand called Elements and the company
plans to eventually expand into other household products. Amazon
shares inched down 0.1%, while those of Procter & Gamble fell
1.3% premarket.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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