Stock futures edge lower ahead of opening

[May 05, 2010]  NEW YORK (AP) -- Stock futures dipped Wednesday, a day after major indexes posted their biggest losses in months.

European markets were mixed as investors remain cautious about whether a $144 billion aid package for Greece will help stem the growing debt crisis. German Chancellor Angela Merkel asked her country's lawmakers to rush the approval of Germany's $29.3 billion share of the Greek rescue program.

Stocks plunged around the world Tuesday as fears escalated that Europe might fail to contain Greece's debt problems. The Dow Jones industrial average fell 225 points, its biggest drop in three months.

Investors worry that Europe would have trouble bailing out larger countries like Spain and Portugal because the continent's governments spent so much supporting Greece. There are also concerns that the large debt among European nations could upend a global economic recovery.

Analysts have said that the problems, over the long term, could lead to a collapse of the euro. Sixteen countries use the common currency. The euro fell against the dollar, hitting its lowest level in a year.

Market volatility has increased over the past week as investors' focus alternates between worries about European debt problems and further signs of U.S. economic growth. Tuesday was the fifth time in six sessions the Dow has surged or retreated by triple digits.

Investors looking for continued signs of a domestic recovery will get reports on the service sector and a payroll company's take on jobs. Both are expected to show continued improvement.

Ahead of the opening bell, Dow Jones industrial average futures fell 11, or 0.1 percent, to 10,881. Standard & Poor's 500 index futures fell 1.20, or 0.1 percent, to 1,171.20, while Nasdaq 100 index futures fell 1.50, or 0.1 percent, to 1,968.00.

A private research group is expected to say the service sector again expanded in April. The Institute for Supply Management's service-sector index likely rose to 56 last month from 55.4 in March, according to economists polled by Thomson Reuters. Any reading above 50 indicates growth.

Further expansion of the sector would indicate the largest part of the economy continues to rebound. The service sector accounts for 80 percent of the nation's work force, excluding farmworkers.

High unemployment is considered one of the main stumbling blocks for a sustained recovery of the domestic economy. Adding new jobs would provide investors reassurance that the ongoing rebound remains on track.

Payroll company ADP is expected to report that private-sector employers added 30,000 jobs in April, economists predict. That compares with a loss of 23,000 jobs a month earlier.

The ADP report is seen an early indicator of the government's closely watched monthly employment report, though there are often wide variations because the ADP only accounts for private-sector jobs.

The Labor Department is expected to report on Friday that the unemployment rate was unchanged at 9.7 percent last month as employers added 200,000 jobs.

Meanwhile, bond prices were mixed Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 3.60 percent, compared with late Tuesday.

Gold rose, while oil fell.

Overseas, Britain's FTSE 100 fell 0.2 percent, Germany's DAX index dropped 0.2 percent, and France's CAC-40 rose 0.3 percent.

[Associated Press; By STEPHEN BERNARD]

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