Wall Street set to dip at open after payrolls report

 

 

US stocks were poised to dip slightly at the open on Friday following a weaker-than-expected payrolls report which allayed investor concerns of an imminent interest rate hike by the Federal Reserve.

Futures pared losses after the release of the employment report, which showed nonfarm payrolls rose 142,000 in August, the smallest increase in eight months, while the unemployment rate slipped to 6.1 percent as people dropped out of the labor force.

The soft jobs report doused worries that the Fed might consider moving up plans for an interest rate hike at its next meeting in mid-September after a recent flurry of economic data pointed to a strengthening economy.

 

"It's a little bit of a surprise coming in this low, and the market is probably taking that as a fairly good sign that the Fed remains to the sidelines here for a little bit longer," said Sean Lynch, managing director of global equity and research strategy, Wells Fargo Private Bank in Omaha, Nebraska.

"That was the risk, if it was a blowout to the upside, people might have moved up their forecast on when the Fed starts to raise rates."

The benchmark index has fallen for three straight sessions since closing at a record high of 2,003.37 a week ago. Both the Dow Industrials and S&P 500 scaled fresh intraday highs Thursday, before being weighed down by weak energy shares.

S&P 500 e-mini futures were down 3.25 points and fair value - a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract - indicated a slightly lower open Dow Jones industrial average e-mini futures fell 35 points and Nasdaq 100 e-mini futures up 2.75 points.

Michael Kors shares lost 4.4 percent to $76.49 before the opening bell. The company announced an 11.6 million share secondary offering on behalf of one of its founding shareholders, which will result in the resignation of two board members.

Gap Inc shares lost 6 percent to $43.85 in premarket trading after the retailer posted worse-than-expected August same-store-sales.

US-listed shares of Prana Biotechnology surged 28.5 percent to $2.75 in premarket trading after the company said it received an orphan drug designation for its Huntington Disease treatment.