US stock futures up ahead of May unemployment data

[June 05, 2009]  NEW YORK (AP) -- U.S. stock futures are higher as investors anxiously await the government's tally on job losses in May for evidence on whether the economy is healing.

The advance in U.S. futures came amid gains in overseas markets as investors cheered Rio Tinto's decision to scrap a $19.5 billion deal with China's Chinalco. Instead, the massive mining company has opted to raise money through a stock sale and set up a joint venture with rival mining company BHP Billiton.

In the U.S., investors are focused on jobs as the Labor Department is set to release its unemployment report for May at 8:30 a.m. Eastern time.

Economists are expecting the government to report that 520,000 jobs were lost in May, on top of the 5.7 million jobs that have been lost since the recession began in December 2007. If they are right, it would be the second month in a row that job losses slowed, and the fewest number of job cuts since October.

Investors are hopeful that the number will prove unemployment is stabilizing, especially after they got a pleasant surprise on the jobs market Thursday. The government reported that the number of workers continuing to receive unemployment benefits unexpectedly dropped for the first time in 20 weeks. Initial claims for unemployment benefits also declined.

Unemployment has been one of the most closely watched gauges of the economy's health throughout the recession. Rising job losses affect vast areas of the economy, including consumer spending, retail sales and the housing market.

Ahead of the market's open and the jobs report, Dow Jones industrial average futures rose 31, or 0.4 percent, to 8,761. Standard & Poor's 500 index futures rose 3.40, or 0.4 percent, to 943.90, while Nasdaq 100 index futures gained 3, or 0.2 percent, to 1,496.

Investors also will likely keep a close eye on the financial sector Friday after The Wall Street Journal reported that the Federal Deposit Insurance Corp. is pressing for a shake-up of Citigroup Inc. management, including its Chief Executive Vikram Pandit.

The embattled New York-based bank has already received $45 billion in government rescue funds. Last month, the government determined that it would need to raise an additional $5.5 billion as a buffer against future losses.

Going in to Friday's session, both the S&P 500 index and the Nasdaq are at highs for the year, and both are showing gains for 2009. The Dow is now down just 26 points for the year.

Stocks have rallied over the past three months as improving economic data and better performance of banks gives investors hope that the recession could end some time this year. However, analysts warn that the market is due for a fairly significant pullback following such a huge advance.

On Thursday, stocks rose for the fifth time in six days as upbeat analyst reports on banks and rising oil prices helped lift financial and energy stocks. Investors were also encouraged by the jobs data.

Bond prices slipped early Friday ahead of the jobs data. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.73 percent from 3.71 percent late Thursday.

The dollar was higher against the euro and the British pound, while gold prices fell.

Oil prices dipped after surging on Thursday. Light, sweet crude fell 47 cents to $68.34 in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average gained 1.0 percent. In late morning trading, Britain's FTSE 100 was up 1.4 percent, Germany's DAX index was up 0.3 percent, and France's CAC-40 added 0.9 percent.

[Associated Press; By SARA LEPRO]

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