By Carla Mozee, MarketWatch
Bally Technologies soars on deal with Scientific Games
LONDON (MarketWatch) -- U.S. stock future were down but off the
day's lows ahead of the widely anticipated July jobs report and as
investors remain wary a day after the worst selloff on Wall Street
in months.
While the nonfarm-payrolls report is the marquee event Friday,
investors will will digest comments from two Federal Reserve
members, as well as quarterly results from Chevron and Procter
& Gamble.
Futures for the Dow Jones Industrial Average (DJU4) dropped 72
points, or 0.4%, to 16,423, while those for the S&P 500 index
(SPU4) fell 9.1 points, or 0.5%, to 1,915.70. Futures for the
Nasdaq 100 index (NDU4) declined 19.25 points, or 0.5%, to
3,865.50.
Fresh in the mind of investors is Thursday's selloff that left
the S&P 500 (SPX) down 2%, and the Dow Jones Industrial Average
(DJI) down 317 points. The Dow is now lower for the year.
Triggers for the selloff included a quarterly rise in the U.S.
employment cost index, on a larger-than-expected increase in wages.
Higher wages could push up inflation and prompt the Federal Reserve
to raise interest rates.
The rise in the ECI reading drove "a general lack of risk
appetite around the market," said Richard Perry, market analyst at
Hantec Markets, in emailed comments. Need to Know for Friday: Don't
be a hero and a call for the S&P 500 to hit 2,500
The Labor Department is due to release its July jobs report at
8:30 a.m. Eastern Time. Fed Chairwoman Janet Yellen "will be
watching for wage growth in the payrolls report today," said Perry,
noting the general estimate is for a rise of 0.2%. "If this comes
in higher, then it could be the key takeaway from the report and
cause more selling," said Perry.
Economists polled by MarketWatch forecast a 235,000 increase in
net employment and a decline in the jobless rate to 6%, from
6.1%.
Earlier this week, the Fed said it expects the start of rate
increases to come a "considerable time" after the end of its
bond-buying program. Charles Plosser of the Philadelphia Fed is
expected to issue a statement on his dissent of that view later
Friday.
Richard Fisher, the president of the Dallas Fed and a voting
member on the Fed's rate committee, said on an interview with CNBC
said the central bank is now closer to raising rates after its
two-day policy meeting that ended Wednesday.
Other data due Friday include consumer sentiment and
manufacturing activity in July, and monthly auto sales.
Company news
Procter & Gamble (PG) topped profit estimates, and shares
rose nearly 2% in premarket.
On the earnings front, Chevron (CVX) is expected to report
second-quarter earnings of $2.64 a share.
Shares of Mobileye (MBLY), which makes camera-based
driver-assistance systems in cars, will make their trading debut on
the New York Stock Exchange. The shares late Thursday priced at $25
a share, above an expected range of $21 to $23 a share. Also read:
Four things to know about Mobileye.
GoPro Inc. (GPRO) shares fell 10% in premarket trade. The
camcorder maker posted better-than-expected second-quarter results
late Thursday, but the shares fell, giving back some of their 30%
increase since their June debut.
Deal news sent shares of Bally Technolgoies Inc. (BYI) up 33% in
premarket. Shares of Scientific Games Corp. (SGMS) eased 3% after
it announced plans to buy Bally in a deal worth around $5.1
billion.
In Europe, stocks fell sharply. In Asia, Japan's Nikkei Average
lost 0.6%.
Crude-oil futures (CLU4) lost ground, and gold futures (GCU4)
advanced just over $1 an ounce. The ICE U.S. Dollar index (DXY) was
at 81.482, up from 81.446 on Thursday.
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