Friday February 2nd

2-02-2018

Dow futures slide 211 points as rates shoot higher

U.S. stock index futures were on track to open sharply lower on Friday after the monthly jobs report sent interest rates higher. Dow Jones industrial average futures dropped 207 points, while S&P 500 futures and Nasdaq 100 futures pulled back 15.5 points and 20.75 points, respectively. The U.S. economy added 200,000 jobs in January, according to the Bureau of Labor Statistics. Economists polled by Reuters expected growth of 180,000. Wages, meanwhile, rose 0.3 percent last month, in line with expectations. But the report also sent interest rates higher. The benchmark 10-year yield rose to 2.83 percent on the back of the report, keeping pressure on stock futures. Investors have been jittery about the recent rise in interest rates, worrying they may be rising too fast. On Thursday, the 30-year yield broke above 3 percent for the first time since May. "The reaction in the bond market is due to the rise in average hourly earnings," said James Ragan, director of individual investor group research at D.A. Davidson. "I think the market is now thinking of the possibility that the Fed could raise rates four times this year rather than three." The Federal Reserve has forecast three rate hikes for 2018. This has been a volatile week for U.S. stocks. The Dow, S&P 500 and Nasdaq were on pace to snap four-week winning streaks. In earnings, Exxon Mobil reported weaker-than-expected earnings on Friday.Tech giants Apple and Amazon reported quarterly results Thursday after the close. Both companies saw their stocks rise after releasing their results. Shares of Google-parent Alphabet, meanwhile, fell 3.2 percent in the premarket after its earnings missed expectations. Asian shares came under pressure on Friday after Wall Street closed mixed and yields on U.S. government debt rose in the last session. Japan's Nikkei 225 resumed its slide, closing down 0.9 percent, or 211.58 points, at 23,274.53 after snapping a six-day losing streak in the previous session. Across the Korean Strait, the Kospi fell 1.68 percent to end at 2,525.39 as declines in blue chip tech names drove the index lower. China markets reversed slight declines to close above the flat line after sliding for most of the week. Hong Kong's Hang Seng Index edged up 0.17 percent by 3:12 p.m. HK/SIN. On the mainland, the Shanghai composite advanced 0.46 percent to close at 3,462.94 after touching its lowest levels in two weeks on Thursday. Meanwhile, the Shenzhen composite finished the session 0.03 percent higher. The blue chip CSI 300 index rose 0.61 percent by the end of the day. Oil rose for a third day on Friday after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production. Brent futures, the global benchmark, were up 19 cents, or 0.3 percent, at $69.84 a barrel by 0352 GMT. U.S. West Texas Intermediate (WTI) crude was up 28 cents, or 0.4 percent, at $66.08 a barrel. Gold prices lost more ground on Friday after U.S. jobs data turned in a stronger number than expected, as traders continue to look for any implications for the outlook for U.S. monetary policy over the rest of the year. Spot gold lost 0.7 percent after the non-farm payroll data, falling to $1,340.18 per ounce. It has fallen more than 0.1 percent so far this week. U.S. gold futures fell 0.36 percent at $1,343.10 per ounce.