Futures Slip After Weak Government Jobs Report
U.S. stock index futures declined Friday following a weaker-than-expected government employment report, adding to signs of economic sluggishness.
Non-farm payrolls rose much less than expected, with employers adding just 115,000 jobs in April. Economists surveyed by Reuters expected employers to increase hiring by 170,000 workers. Still, the unemployment rate slipped to 8.1 percent, the lowest since January 2009.
“It’s crystal clear that the economic recovery is in doubt—you have an economy that is in need of organic growth and you’re not getting it from these reports,” said Todd Schoenberger, managing principal at The BlackBay Group. “Participation rate dropped and average working hours are down—if you’re lucky enough to have a job, your spending power is still down.”
European shares were lower, ahead of a potentially tumultuous weekend for European politics during which France and Greece hold elections. In the UK, the opposition Labor party made significant gains in local elections over the ruling Conservative and Liberal Democrat coalition, in what will likely come to be seen as a protest vote against the government’s austerity measures.
Among earnings, LinkedIn reported better-than-expected revenue and profit, racking up strong growth from services that help companies find and hire employees.
Kraft Foods results edged above Wall Street estimates and also reaffirmed its full-year growth targets. The Dow component said it was on track with plans to split into two companies later this year.
Bank of America said in a quarterly filing that it would have been required to post $5.1 billion in collateral under derivatives contracts as of March 31 if major ratings agencies had downgraded its debt by two notches.
Bailed-out insurer AIG said quarterly profit more than doubled from a year earlier, exceeding expectations with the help of investment gains.
Cablevision Systems added more video subscribers than expected in the first quarter, but its shares fell 8 percent as investors balked at the declining profit and cash-flow growth it reported on Thursday.
Toy maker LeapFrog Enterprises posted strong quarterly results, helped by an earlier, faster and strong demand for its LeapPad learning tablet.
In further corporate news, United Parcel Service said it approved a new $5 billion share buyback program and increased the amount of cash it would pay to finance its largest takeover in its nearly 105-year history. The largest package delivery company said it now expects to use about $5 billion in cash and to issue about $1.8 billion in new debt to fund its purchase of Dutch company TNT Express.
Meanwhile, fruit and fresh vegetable distributor Dole Food may spin off one or more of its units as the company initiated a strategic business review of its business.
—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC—
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