Stocks headed for rebound ahead of jobs report

[November 07, 2008]  NEW YORK (AP) -- Wall Street anticipated a dreadful jobs report Friday, but seemed to believe the bad news is already priced into the market, and stock futures rose ahead of the market's open.

Investors expect the Labor Department at 8:30 a.m. Eastern time to report that employers cut 200,000 jobs in October -- more than September's 159,000 loss, which had been the largest in more than five years. Wall Street also expects the unemployment rate to rise to 6.3 percent from 6.1 percent, according to the median estimate of economists surveyed by Thomson/IFR.

When people lose their jobs, they tend to pare back family budgets and fall behind on their debt -- not a good prospect for an economy suffering a simultaneous credit crisis and spending slowdown.

Quarterly reports from General Motors Corp. and Ford Motor Co. are also likely to be abysmal; analysts expect them to reveal billions of dollars in additional losses and job cuts. The auto industry has been one of the hardest hit by the financial crisis.

But many investors are betting that the news is baked into the market already -- the Dow Jones industrial average and other major indexes have shed about 10 percent since the election of Barack Obama to the White House, an event that was preceded by a big rally. If any of the data comes in significantly worse than anticipated, though, the market could be in for another sell-off.

Ahead of the market's open, Dow Jones industrial futures rose 150, or 1.72 percent, to 8,850. Standard & Poor's 500 index futures added 18.90, or 2.09 percent, to 923.40, and Nasdaq 100 index futures jumped 30.00, or 2.42 percent, to 1,270.50.

On Thursday, Wall Street suffered its second straight day of massive losses -- this time set off by Cisco Systems Inc.'s warning about waning demand and by retailers posting dismal sales figures for October.

On Friday, the dollar fell against most other major currencies, while gold prices rose.

Light, sweet crude rose $1.36 to $62.13 a barrel in premarket trading on the New York Mercantile Exchange.

In Asian trading, Japan's Nikkei index fell 3.55 percent, and Hong Kong's Hang Seng Index rose 3.29 percent. In morning trading in Europe, Britain's FTSE 100 rose 1.64 percent, Germany's DAX index rose 0.86 percent, and France's CAC-40 rose 0.69 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By MADLEN READ]

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