LONDON (Thomson Financial) - Wall Street is looking little changed as
investors keep to the sidelines ahead of the release of the October employment
report in a market where concerns about economic growth, inflation and credit
issues sparked a steep sell-off in equities yesterday.
According to spread bettors IG Index, the Dow Jones Industrial Average is
expected to open up 5 points at 13,573. Separately, S&P 500 futures were off
2.50 points at 1,513.30 while Nasdaq 100 futures dipped 0.50 point to 2,215.
Yesterday stocks ended sharply lower, with the Dow industrials plunging more
than 360 points, on concern high oil could derail economic growth, stoke
inflation and prompt an end to the US Federal Reserve's current cycle of
interest rate cuts.
A broker downgrade of Citigroup and Bank of America on subprime exposure
concerns also weighed heavily on sentiment.
Any recovery in market sentiment today may rest with the latest employment
figures due out at 12.30 GMT.
The economy is expected to have created 85,000 jobs in October after
delivering 110,000 new jobs in the prior month, according to the median estimate
of economists polled by Thomson's IFR Markets.
IFR said it may be the revision of September non-farm payrolls that
determines sentiment.
"Since 1979, the absolute revision for the ninth month averaged 74,000,
making September (by far) the month with the largest positive revisions," IFR
said.
In September 2006 alone, non-farm payrolls were revised higher by 152,000,
IFR noted.
The unemployment rate, meanwhile, is expected to hold steady at 4.7 pct.
September factory orders are also scheduled for release at 2 pm GMT.
In the energy pits, oil edged higher on concern over tight supplies going
into peak demand with the winter in the northern hemisphere looming.
But it remained off record highs as a sell-off in global equities on concern
over slowing world growth capped gains.
New York light sweet crude for December delivery was last up 45 cents at
93.94 usd a barrel, but off a record of 96.24 usd.
The dollar remained under pressure on concern over the outlook for US
economic growth.
At last check, the euro was up 0.4 pct at 1.4478 usd. Against the Japanese
yen, the greenback gained 0.3 pct to 114.76 as traders unwound risky carry
trades given the jitters over the prospects for global growth.
Carry trades involve selling assets in low-yielding assets and placing the
proceeds in more risky, higher-yielding investments.
Gold was little changed ahead of today's data. The benchmark December
contract was off 40 cents at 793.30 usd an ounce.
On the bond market, the yield on the benchmark 10-year note stood at 4.36
pct.
In company news, CBS will be in focus after the media group posted a
forecast-beating third-quarter profit, but a 3 pct drop in revenue over the
three month period may have some investors concerned.
The company attributed the decline to lower television license fees, the
sale of several radio and TV stations and the loss of the UPN television
network, which was shut down in September of last year.
Operating income was essentially flat at $645.8 million as the gains in TV,
outdoor advertising and book publishing were offset by declines in radio.
Electronic Arts may see early gains after the video game maker posted an
adjusted quarterly profit that topped analyst estimates, although revenue for
the three month period came up just shy of the consensus forecast.
For the third quarter, EA forecast adjusted earnings of 75 cents to 95 cents
per share on sales of $1.33 to $1.58 billion.
Analysts were predicting earnings of 94 cents per share.
NYSE Euronext said net profit soared 279 pct year-on-year to 258 mln usd in
the third quarter, lifted by record trading volumes as well as the benefits of
the merger of the New York Stock Exchange company with the Euronext group.
EPS more than doubled to 97 cents from 43 as revenues surged to 1.198 bln
usd from 602 mln.
Health insurer Cigna Corp said Friday its third-quarter earnings rose 23
percent on increased premiums and fees to top Wall Street expectations, and
raised its outlook for the full year.
International Paper, Rogers Corp and Viacom are some of the companies
scheduled to report earnings before the market opens.
Mark.cotton@thomson.com
mc1/ajb
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