Futures Lose Gains on Weak Jobs Numbers

CNBC.com and wires

Stock index futures pointed to a flat open for Wall Street on Wednesday as a round of economic data pointed to little hope for a jobs recovery anytime soon.

The ADP employment report on private-sector employment for September showed a 39,000 drop in payrolls, well below expectations for a 20,000 increase.

At the same time, Challenger, Gray & Christmas said planned layoffs increased 7 percent in September, a slow pace but one that also provided little indication that the jobs picture was improving.

The jobs weakness coupled with a credit downgrade for Ireland to pressure futures.

Fitch Ratings said it was cutting the Irish government's credit rating to A+ and warned of future cuts unless the nation embraces austerity measures.

The Dow was slightly above fair-market value, though S&P 500 futures and Nasdaq tech gauge briefly slipped into negative territory.

In other economic news, U.S. mortgage applications for home purchases rosefor a second straight week, although applications for refinancing loans fell for a fifth straight week, the Mortgage Bankers Association reported. Taking both into account, the seasonally adjusted index of mortgage applications fell 0.2 percent for the week ended Oct. 1

The U.S. inventory data is due at 10:30 am.

On the earnings front, shares of Monsanto rose in pre-market trading despite posting a wider-than-expected loss in the fourth quarter, and warnings that 2011 is likely to be weak as well. Constellation Brands' shares were unchanged in the pre-market after reporting second-quarter profit fell to 43 cents a share, from 45 cents a year ago, below analysts expectations for a profit of 49 cents a share. Revenue for the beverage company also fell.

Costcoposted higher quarterly profit on Wednesday as consumers began spending more on discretionary items such as apparel.

Net income rose to $432 million, or 97 cents a share, in the fiscal fourth quarter ended August 29, from $374 million, or 85 cents a share, a year earlier. The profit was two cents ahead of expectations but didn't satisfy investors, as Costo's shares fell more than 2 percent in premarket trading.

After the bell Tuesday, Yum Brands reported a 7 percent rise in third-quarter net income to $357 million, or 74 cents a share. Excluding items, profits were 73 cents a share, 1 cent better than forecast by analysts surveyed by Thomson Reuters I/B/E/S. The owner of KFC and Pizza Hut raised its 2010 earnings target to earnings of $2.48 a share before items, up from $2.43 a share.

Also in focus is General Electric , which said a$1.2 billion takeover approach it made to Wellstreamhad been rebuffed by the British oil services company.

M&T Bank saw its shares fall 4 percent in pre-market trading after Allied Banks said it will hold a public offering its 22.4 percent stake in M&T. Allied shares fell 6 percent.

Miners were among the biggest gainers in Europe in early trade as gold hit a record high, and copper prices hit a two-year high, boosted in part by a weaker dollar.

The European Central Bank decides on rates on Thursday, but investors are more focused on currencies ahead of an IMF/World Bank meeting later this week.

Countries risk undermining the global economic recovery if they use their currencies to try to boost domestic growth, the head of the International Monetary Fund warned on Tuesday in a newspaper interview.

On Tap This Week:

WEDNESDAY: Weekly oil inventories; CTIA Wireless.
THURSDAY: Monthly chain store sales; BoE announcement; ECB announcement; Kansas City Fed Pres Hoenig speaks; Consumer credit; Mosaic shareholder meeting; Earnings from PepsiCo and Alcoa
FRIDAY: Monthly non-farm payroll; Wholesale trade; NY Comic Con; IMF, World Bank annual meetings

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