MarketWatch.com - Pre-Market Indications

Wednesday, March 31, 2010

Indications: U.S. stock futures deeper in red after ADP report

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures declined Wednesday after a surprise report showing private-sector employment dropped during March.

S&P 500 futures fell 3.9 points to 1,165.50 and Nasdaq 100 futures fell 5 points to 1,960.50. Futures on the Dow Jones Industrial Average fell 28 points.

The dollar /quotes/comstock/11j!i:dxy0 (DXY 81.03, -0.44, -0.54%) also extended losses after ADP said 23,000 private-sector jobs were lost during March, surprising economists who expected a 40,000 rise.

"The March employment decline was the smallest since employment began falling in February of 2008. Yet, the lack of improvement in employment from February to March is consistent with the pause in the decline of initial unemployment claims that occurred during the winter," said Joel Prakken, chairman of Macroeconomic Advisers LLP.

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Chicago PMI data for March and factory orders for February also are due for release.

Weekly oil inventories data also is due Wednesday.

Despite the lack of progress on employment, the S&P 500 this year is up over 5% heading into the final day of the first quarter as investors grow increasingly optimistic that the economy won't fall into a double-dip recession.

"Remember the Double Dip? This was a big concern last year when the economy was just starting to recover," said strategist Ed Yardeni in a note to clients. "Well, the economy is still recovering, and so are corporate profits."

Of companies in the spotlight, Honeywell /quotes/comstock/13*!hon/quotes/nls/hon (HON 44.95, +0.08, +0.18%) rose 1.8% in premarket action after upping its first-quarter outlook, citing stronger orders and sales as well as cost controls.

But SAIC /quotes/comstock/13*!sai/quotes/nls/sai (SAI 18.98, +0.07, +0.37%) , the contractor, slumped 5% in premarket trade as it warned on a slower-than-anticipated pace of new contract awards as well as tougher government contracting environment.

After the close, Research In Motion /quotes/comstock/15*!rimm/quotes/nls/rimm (RIMM 74.92, -0.78, -1.03%) and Micron Technology /quotes/comstock/15*!mu/quotes/nls/mu (MU 10.79, +0.16, +1.51%) , are due to report quarterly results.

On the M&A front, Peabody Energy /quotes/comstock/13*!btu/quotes/nls/btu (BTU 45.67, -0.40, -0.87%) had a $3 billion takeover bid rejected by Australia coal miner Macarthur Coal.

Overseas, Asian stocks ended slightly weaker, while Europe stocks rose in late-morning action.

Metals futures, notably platinum, made strong gains, and oil futures rose by $1 a barrel.

Steve Goldstein is MarketWatch's London bureau chief.


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