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US STOCKS-Futures lower ahead of jobs data as dollar firms

Published 10/08/2010, 07:38 AM
Updated 10/08/2010, 07:40 AM

By Chuck Mikolajczak

NEW YORK, Oct 8 (Reuters) - U.S. stock index futures fell on Friday on concerns a weak jobs report could increase the likelihood the U.S. Federal Reserve will print more money in an effort to buttress the economic recovery.

* The dollar held steady on Friday as investors booked profits, recovering from a sell-off earlier this week that sent the euro to an eight-month high. The dollar and equities have been inversely correlated as investors take money out of stocks for the perceived safety of the greenback.

* "If this unemployment number should surprise everybody and come in much stronger than expected, then obviously you are going to see the dollar rally. And that means the market could actually move lower as risk aversion moves into play," Cardillo added.

* U.S. non-farm payrolls data, scheduled for release at 8:30 a.m. EDT, is forecast to show the U.S. economy added no jobs in September as shrinking government payrolls offset modest gains in private hiring. If the forecast proves true, it could cement expectations of further Fed monetary action.

* "It's already baked in the sand. We know the jobs market is going to remain tight for a while. The question is how negative is the report today," said Peter Cardillo, chief market economist at Avalon Partners in New York.

* "If it is a real negative, that steps up the prospect on quantitative easing two happening sooner than later."

* The private sector was expected to have added 75,000 jobs in September, while the unemployment rate was seen ticking up to 9.7 percent from 9.6 percent in August.

* S&P 500 futures lost 4.8 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 40 points and Nasdaq 100 futures fell 9.25 points.

* Alcoa Inc rose 3.6 percent to $12.64 in premarket trade as it kicked off the U.S. corporate earnings season after the close Thursday. The aluminum producer reported lower quarterly profit, but said global markets were strengthening.

* Micron Technology Inc, the U.S. maker of memory chips for computers, missed earnings and revenue estimates as weak spending by corporations and consumers hurt prices..

* European shares fell in early trade as the dollar edged lower ahead of the jobs data.

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