Disappointing Job Growth May Weigh On Wall Street - U.S. Commentary

(RTTNews) - Stocks may move to the downside in early trading on Friday following the release of disappointing jobs data. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 20 points.

The futures came under pressure after the Labor Department released a report showing weaker than expected job growth in the month of December.

The Labor Department said non-farm payroll employment climbed by 151,000 jobs in January compared to economist estimates for an increase of about 188,000 jobs.

While the report also said the jump in employment in December was downwardly revised to 262,000 jobs from 292,000 jobs, the increase in employment in November was upwardly revised to 280,000 jobs from 252,000 jobs.

With the combined revisions, job growth in November and December was only 2,000 jobs lower than previously reported.

The Labor Department also said the unemployment rate edged down to 4.9 percent in January from 5.0 percent in December, while economists had expected the rate to come in unchanged.

The unexpected decrease pulled the unemployment rate down to its lowest level since a matching rate in February of 2008.

"It is difficult to see exactly what the Fed will make of this," said Rob Carnell, Chief International Economist at ING Commercial Banking. "But with global financial conditions tightening, this release says 'more data needed' before drawing any firm conclusions about any shift in Fed policy."

"That does at least suggest that a March hike remains off the table," he added. "And hopefully by then, we will have a better idea of whether things are really slowing, with no further hikes possible, or whether recent data were just a soft patch and the Fed can resume tightening later in the year."

A separate report from the Commerce Department showed that the U.S. trade deficit widened more than expected in December amid an increase in imports and a decrease in exports.

The report said the trade deficit widened to $43.4 billion in December from a revised $42.2 billion in November. The deficit has been expected to widen to $43.0 billion.

Stocks turned in a relatively lackluster performance during trading on Thursday before ending the session modestly higher. The choppy trading came on the heels of the substantial volatility that was seen in the previous session.

The major averages all managed to finish the session in positive territory. The Dow climbed 79.92 points or 0.5 percent to 16,416.58, the Nasdaq edged up 5.32 points or 0.1 percent to 4,509.56 and the S&P 500 rose 2.92 points or 0.2 percent to 1,915.45.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index slumped by 1.3 percent, while Hong Kong's Hang Seng Index advanced by 0.6 percent.

The major European markets have also turned mixed on the day. With the U.K.'s FTSE 100 Index has surged up by 1.2 percent, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 1.2 percent.

In commodities trading, crude oil futures are inching up $0.03 to $31.75 a barrel after receding $0.56 to $31.72 a barrel in the previous session. An ounce of gold is currently trading at $1,152.20, down $5.30 from the previous session's close of $1,157.50. On Thursday, gold jumped $16.20.

On the currency front, the U.S. dollar is trading at 117.13 yen compared to the 116.78 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1150 compared to yesterday's $1.1209.