Futures tumbled further following a report that non-farm payrolls were unchanged in August, disappointing traders who had been estimating an increase.
Employment growth ground to a halt in August as non-farm payrolls were unchanged, according to the Labor Department—the weakest reading since last September. Despite the lack of employment growth, the jobless rate held steady at 9.1 percent.
"Today's jobs report represents what many realists already have known: There's a tremendous lack of confidence in consumer-related companies," said Todd Schoenberger, managing director at LandColt Trading. "The country desperately needs the President to be a positive influence [next] Thursday."
President Obama is scheduled to address a joint session of Congress next week to unveil proposals to create new jobs. However, some economists are skeptical Obama will get Congress to agree to significant new spending on jobs.
“We’re going to take out some of the near-term support areas,” Art Cashin, director of floor operations at UBS Financial Services told CNBC. “If we got terribly bad and we go down to 1270-75 [on the S&P], then you’d see warning signals go off. So as long as they can stay above that level, they can possibly regroup and come back.”
A lawsuit is being prepared against the big U.S. banksby the Federal Housing Finance Agency, including Bank of America,JPMorganChase , Goldman Sachs and Deutsche Bank according to a New York Times report.
Elsewhere, Netflix tumbled after Starzbroke off talks to renew its streaming deal with the online video service. Starz is a key revenue source for Netflix.
Oracle suffered a blow when a U.S. judge tossed a $1.3 billion in the company's favorthat it won against rival SAP in a copyright dispute last year.
On the earnings front, Campbell Soup posted a lower-than-expected profit, due to restructuring charges and a decline in sales. However, shares jumped after the canned soup maker's earnings were higher than estimated, excluding one-time items.
European shares also extended their losses following the dismal U.S. jobs report. Meanwhile, Greece and its international lenders said that the country will miss its budget deficit target this year, adding to concerns that the region's sovereign debt crisis may worsen.
On Tap Next Week:
MONDAY: Labor Day Holiady—All Markets Closed
TUESDAY: ISM non-mfg index, Fed's Kocherlakota speaks; Earnings from PepBoys
WEDNESDAY: Weekly mortgage applications, Beige Book; Earnings from Hovnanian
THURSDAY: BoE announcement, ECB announcement, international trade, jobless claims, quarterly services survey, oil inventories, Bernanke speaks, consumer cerdit, TI mid-quarter update, OECD's global economic outlook, Obama talks jobs/economy; Earnings from Smithfield Foods
FRIDAY: McDonald's August Sales, wholesale trade, G7 finance ministers meet; Earnings from Kroger, Lululemon Athletica