Mixed Jobs Data in Focus on Wall Street

By Investors Hub

The major U.S. index futures are pointing to a lower opening on Friday following the release of the closely watched monthly employment report.

The downward momentum on Wall Street comes as the report from the Labor Department showed weaker than expected job growth in the month of April but a bigger than expected drop by the unemployment rate.

After falling sharply early in the session, stocks staged a significant recovery attempt over the course of the trading day on Thursday. The major averages pared their losses considerably before ending the session mixed.

While the Dow managed to end the day slightly higher, the Nasdaq and the S&P 500 closed in negative territory. The Dow inched up 5.17 points or less than a tenth of a percent to 23,930.15, but the Nasdaq edged down 12.75 points or 0.2 percent to 7,088.15 and the S&P 500 dipped 5.94 points or 0.2 percent at 2,629.73.

The recovery attempt on Wall Street came as traders picked up stocks at reduced levels, with the Dow bouncing off its lowest intraday level in a month.

Uncertainty about the outcome of highly anticipated trade talks between the U.S. and China contributed to the early sell-off.

The U.S. delegation led by Treasury Secretary Steven Mnuchin is expected to raise concerns with Chinese Vice Premier Liu He about a number of China’s trade practices.

In a post to Twitter, President Donald Trump said, “Our great financial team is in China trying to negotiate a level playing field on trade!”

“I look forward to being with President Xi in the not too distant future,” he added. “We will always have a good (great) relationship!”

Ahead of the talks, the Commerce Department released a report showing a significantly narrower U.S. trade deficit in the month of March.

The Commerce Department said the trade deficit narrowed to $49.0 billion in March from a revised $57.7 billion in February. Economists had expected the trade deficit to narrow to $50.0 billion.

The narrower trade deficit came as the value of exports jumped by 2 percent to $208.5 billion, while the value of imports tumbled by 1.8 percent to $257.5 billion.

However, the Commerce Department said the trade deficit with China widened to $35.4 billion in March from $34.7 billion in February, as imports rose by more than exports.

Negative sentiment was also generated by the release of a report from the Institute for Supply Management showing a bigger than expected slowdown in the pace of growth in the service sector in the month of April.

The ISM said its non-manufacturing index fell to 56.8 in April from 58.8 in March. While a reading above 50 still indicates growth in the service sector, economists had expected the index to show a more modest decrease to 58.1.

Tobacco stocks showed a significant move to the upside on the day, driving the NYSE Arca Tobacco Index up by 1.5 percent. The index bounced off its lowest closing level in almost three months.

Considerable strength also emerged among housing stocks, as reflected by the 1.3 percent gain posted by the Philadelphia Housing Sector Index.

On the other hand, notable weakness remained visible among natural gas stocks, with the NYSE Arca Natural Gas Index slumping by 2.3 percent.

Most of the other major sectors ended the day showing more modest moves, contributing to the lackluster close by the broader markets.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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