Dipo Olowookere
By Investors Hub
The major U.S. index futures are currently pointing to a lower opening on Friday, with stocks likely to extend the pullback seen over the past few sessions.
Early selling pressure may be generated in reaction to a report from the Labor Department showing much weaker than expected job growth in the month of February.
The Labor Department revealed job growth nearly ground to a halt in February after soaring in January, although the unemployment still edged lower.
The disappointing jobs data is likely to overshadow a separate report from the Commerce Department showing a substantial rebound in housing starts in January.
Concerns about the global economy are also likely to weigh on the markets after the European Central Bank downgraded its 2019 GDP forecast and China reported weaker than expected trade data for the month of February.
Extending the downward move seen on Wednesday, stocks saw considerable weakness during trading on Thursday. With the drop on the day, the Nasdaq and the S&P 500 pulled back further off the more than four-month intraday highs set on Monday.
The major averages finished the session firmly in negative territory. The Dow slid 200.23 points or 0.8 percent to 25,473.23, the Nasdaq tumbled 84.46 points or 1.1 percent to 7,421.46 and the S&P 500 fell 22.52 points or 0.8 percent to 2,748.93.
The continued weakness on Wall Street came after the European Central Bank slashed its economic growth forecast, citing lingering, mainly external uncertainties.
The ECB also said it now expects eurozone interest rates to remain at the current level at least till the end of this year.
The eurozone growth outlook for this year was cut to 1.1 percent from 1.7 percent, while the outlook for next year was trimmed to 1.6 percent from 1.7 percent.
The risks surrounding the euro area growth outlook are still tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, the ECB said.
“While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year,” said ECB President Mario Draghi.
He added, “The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment.”
Reflecting the concerns about the economic outlook, the ECB announced steps to preserve favorable bank lending conditions and the smooth transmission of monetary policy.
The ECB said a new series of quarterly targeted longer-term refinancing operations (TLTRO-III) will be launched, starting in September 2019 and ending in March 2021, each with a maturity of two years.
Steel stocks showed a substantial move to the downside amid concerns about global demand. Reflecting the weakness in the sector, the NYSE Arca Steel Index slumped by 1.9 percent.
Considerable weakness was also visible among financial stocks, with the NYSE Arca Broker/Dealer Index and the KBW Bank Index falling by 1.8 percent and 1.4 percent, respectively.
Oil service stocks also saw significant weakness on the day, dragging the Philadelphia Oil Service Index down by 1.6 percent. The weakness among oil service stocks came despite an increase by the price of crude oil.
Retail, computer hardware and networking stocks also saw notable weakness, while gold stocks bucked the downtrend even though the price of the precious metal closed modestly lower.
