MarketWatch.com - Pre-Market Indications

Wednesday, October 6, 2010

Indications: U.S. stock futures turn lower after ADP data

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By Simon Kennedy and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock-market futures reversed earlier gains to tally modest losses Wednesday after ADP reported that the private sector unexpectedly shed 39,000 jobs in September.

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But the data, which come two days before the government’s monthly employment report, also included an upward revision for August.

“The markets have the reality of a sluggish economy on one hand faced up against more [quantitative easing] on the other. With this said, market participants pay much more attention to the government payrolls report, and thus Friday’s figure will be more market-moving,” wrote Peter Boockvar, equity strategist at Miller Tabak, in a note.

Up nearly 30 points before the report, futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\z10 (DJZ10 10,910, +46.00, +0.42%)  were lately down 3 points to 10,861, and those for the Nasdaq 100 /quotes/comstock/21m!f:nd\z10 (NDZ10 2,008, -10.50, -0.52%)  fell 4.25 points to 2,014.25.

S&P 500 futures /quotes/comstock/21m!f:sp\z10 (SPZ10 1,157, +2.10, +0.18%)  were off 1.2 points to 1,153.5.

U.S. markets rallied sharply Tuesday, as the Dow industrials jumped more than 193 points to close within striking distance of 11,000 and at its highest level since May.

European stocks wait for U.S. jobs data

European markets are looking ahead to more exciting events later in the week, although commodities and commodity stocks are bid as they might be among the beneficiaries of more quantitative easing.

Among currencies, the dollar edged lower against the Japanese yen, recently down at ¥82.99.

Crude-oil futures fell 40 cents to $82.42 a barrel, while gold continued its ascent, as the December contract briefly surpassed $1,350 an ounce.

Among companies in focus, Costco Wholesale Corp. /quotes/comstock/15*!cost/quotes/nls/cost (COST 63.70, -0.96, -1.48%)  said its fiscal fourth-quarter net income rose 16% to $432 million, or 97 cents a share, on a 7.8% increase in net sales. Analysts had expected a profit of 95 cents a share. Shares of the company slipped 2.7% in premarket trading.

Earnings season will get into full swing after Thursday’s close, when Alcoa Inc. /quotes/comstock/13*!aa/quotes/nls/aa (AA 12.45, +0.31, +2.55%)  reports its third-quarter numbers.

Earnings expectations for blue-chip companies are relatively high, so any market reaction is likely to be more violent on bad news than on good news â€" broadly the opposite of the situation with employment data, RBS analysts said.

In deal news, Johnson & Johnson /quotes/comstock/13*!jnj/quotes/nls/jnj (JNJ 62.71, -0.09, -0.15%)  said it will buy the 82% of biopharmaceutical company Crucell /quotes/comstock/15*!crxl/quotes/nls/crxl (CRXL 34.16, +0.34, +0.99%)   /quotes/comstock/24s!e:crxl (NL:CRXL 24.64, +0.09, +0.37%)  that it doesn’t already own for 1.75 billion euros ($2.42 billion).

General Electric Co. /quotes/comstock/13*!ge/quotes/nls/ge (GE 16.96, +0.45, +2.73%)  said it had a bid turned down by the U.K.’s Wellstream Holdings PLC /quotes/comstock/23s!e:wsm (UK:WSM 761.00, -19.00, -2.44%) . GE said there’s no certainty it will increase its bid, which was worth around $1.2 billion.

In international markets, Japan’s Nikkei 225 Average closed up 1.8%, while France’s CAC 40 index was recently up 0.8%. See Europe Markets

Simon Kennedy is the City correspondent for MarketWatch in London. Kate Gibson is a reporter for MarketWatch, based in New York.

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