Stock futures lower ahead of unemployment report

[December 05, 2008]  NEW YORK (AP) -- Wall Street was on edge Friday as investors waited to learn how many jobs were lost as employers slashed their payrolls in November. Stock index futures were trading moderately lower.

The Labor Department's monthly employment report is expected to show that the unemployment rate soared to 6.8 percent in November from 6.5 percent in October and that companies cut another 320,000 jobs. That would represent the deepest cut to monthly payrolls since October 2001, when the economy was suffering through a recession following the Sept. 11 terrorist attacks. The report is due at 8:30 a.m. EST.

Employers cut 1.2 million jobs through October. And the layoffs keep coming -- on Thursday, bellwether companies like AT&T Inc. and DuPont Co. announced they were cutting thousands of jobs.

The fear on Wall Street is that a rising unemployment rate will, among other things, lead to a more severe pullback in consumer spending, which is a crucial component to helping the economy rebound. Weak retail sales reports for the month of November released Thursday added to these concerns.

Meanwhile, investors also are awaiting a second day of congressional hearings with the heads of Detroit's top three automakers, who are appearing on Capitol Hill in an effort to save their troubled industry.

General Motors Corp., Ford Motor Co. and Chrysler LLC are collectively seeking $34 billion in emergency funding. While the market largely expects the companies to win some sort of government aid, support for the troubled carmakers wasn't guaranteed.

Later Friday, the Federal Reserve will release consumer credit data for October.

Dow Jones industrial average futures fell 24, or 0.29 percent, to 8,378. Standard & Poor's 500 index futures fell 3.90, or 0.46 percent, to 843.60, while Nasdaq 100 index futures dipped 3.25, or 0.29 percent, to 1,131.75.

Stocks wavered Thursday before tumbling in the final hour of trading as investors grew increasingly cautious ahead of the employment report. The major indexes each fell more than 2.5 percent and the Dow Jones industrial average dropped 216 points after finishing higher in seven of the previous eight sessions.

While some analysts have been hopeful that the string of recent gains signals some stability may be returning to the market, many warn that much volatility remains as Wall Street struggles to emerge from bear territory.

Bond prices were mixed early Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged from late Thursday at 2.56 percent. The yield on the three-month T-bill, considered one of the safest investments, rose just slightly to 0.01 percent from below 0.01 percent late Thursday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose 66 cents to $44.33 a barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average dipped 0.08 percent. In afternoon trading, Britain's FTSE 100 was down 1.42 percent, Germany's DAX index was down 2.80 percent, and France's CAC-40 was down 3.03 percent.

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[Associated Press; By SARA LEPRO]

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