Early indications point to a steady open on Wall Street after the latest monthly jobs data didn't deviate too far from expectations. Less than an hour before the opening bell on Wall Street, stock index futures suggest that the S&P 500 might open Friday's trading session with a modest gain.
The US economy lost 651,000 jobs during the month of February. The loss follows a decline of 655,000 the month before, which was revised down from an initial reading of -598,000. The headline number was not too far from economist estimates, which called for a 650,000 loss.
However, the unemployment rate rose to 8.1 percent from 7.5 percent and its highest levels since 1983. Economists had predicted an increase to 7.9 percent.
While the jobs numbers remain poor, the headline was not as bad as some feared. Stock index futures moved higher on the news, bonds faltered. The benchmark ten-year Treasury note, which was up 6/32nd heading into the report, is down a few ticks and now yields 2.82 percent.
The euro gained .0162 to 1.2710 on the dollar. Meanwhile, the buck is getting slammed against the yen, falling more than one point to 97.09 against the Japanese currency.
Major averages are mixed in overseas action, with Japan's Nikkei leading a decline in Asian markets after falling 280 points, or 3.5 percent, to 7,713. Stock benchmarks are seeing modest gains across Europe.
Crude oil is up 54 cents to $44.15 and gold gained $10.2 to $938 an ounce.
Among the stocks to watch, Wells Fargo (WFC) is up 5.4 percent after announcing plans to slash its dividend to save up to $5 billion a year. H&R Block (HRB) is seeing gains after reporting quarterly earnings of 20 cents per share, double Street estimates. Ann Taylor (ANN) is down more than 20 percent after reporting a quarterly loss of $1.03 per share, which was 48 cents worse than expected.
General Motors (GM), which lost 17.4 percent so far this week, is down another 4.8 percent to $1.77 after the Wall Street Journal reported that the automaker is becoming more open to a speedy bankruptcy.
In the options market, volume and volatility rose as investors endured another tumultuous trading session Thursday. The Dow Jones Industrial Average plunged 282 points to 6,594 and finished up less than 50 points from the lows of the day. The CBOE Volatility Index (.VIX) rallied 2.61 to 50.17 and approximately 7.8 million puts and 8.4 million calls traded on the options exchanges.
General Electric (GE) was actively traded. Shares hit a high of $7.17 early after the company's CFO said on CNBC that speculation about risks to GE Capital are overdone. However GE was caught in Thursday's downdraft and hit a low of $6.53 midday. Shares closed down 3 cents to $6.66 and volume in the options market was once again heavy, with 438,000 puts and 335,000 calls traded. March 5 puts topped the most active list, with 137,000 contacts traded.
Bearish trading also surfaced in GMX Resources (GMXR), Ace Ltd (ACE), and PNC Financial (PNC).
Duke Energy (DUK) saw unusual volume Thursday. Shares fell 38 cents to $12.04 and options volume rose to 13 times the normal levels. The action was concentrated in April 12.5 calls after an investor bought two blocks of 9,500 (19,000 contracts total) for an average of 52.5 cents. 37.8K contracts traded total and open interest increased by 34.9K. It looks like some investors were opening new positions in anticipation of a move higher in DUK.
Bullish trading was also seen in Tivo (TIVO), NetApp (NTAP), Cubist Pharmaceuticals (CBST) and the Select Sector Industrials (XLI).
Frederic Ruffy
WhatsTrading.com
