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Jun 3, 2016

U.S. Stock Market Future Indications Update, by MarketWatch - June 3, 2016: U.S. Stock Futures Drop After Ugly Jobs Data.

Anora Mahmudova, Barbara Kollmeyer
U.S. stock futures declined Friday morning after government data showed the economy created just 38,000 jobs last month, the weakest level of hiring in six years.

The weak jobs report is likely to prompt the Federal Reserve to delay rate increases this month, according to analysts.
Dow Jones Industrial Average futures YMM6, -0.40%  fell 78 points to 17,744, while S&P 500 futures ESM6, -0.45%  dropped 10 points to 2,092. Nasdaq-100 futures NQM6, -0.42%  declined 15 points to 4,517.
Wall Street may read the employment data—the lowest level of jobs created since September 2010—as providing further evidence of cracks in the health of the U.S. economy. Financial stocks turned sharply lower in premarket trade with the exchange-traded Financial Select Sector ETF XLF, +0.21%  slumping 1.6%. Lower rates can impeded banks’ ability to generate profits.
Meanwhile, U.S. Treasurys, which are also sensitive to shifts in rate-hike expectations, saw their prices soar, pushing yields sharply lower as doubts about a the vigor of the economy and a possible delay in a rate hike sparked buying appetite for the safety of government bonds. The benchmark 10-year Treasury TMUBMUSD10Y, -4.52%  fell 7.3 basis points to 1.74% at one point.
See: S&P 500, Nasdaq new highs signal bullish Dow Theory uptrends
A rebound in oil prices helped the S&P 500 SPX, +0.28%  notch a fresh closing high on Thursday, and the index finished up 0.3% to 2,105.26, its best close since Nov. 3, 2015. The index is set to finish the week with a meager gain of around 0.3%.
The dollar USDJPY, -1.17%  fell after the jobs report while gold prices GCM6, +2.07%  rallied.
Read: This chart shows why stocks may be heading for a fall
Brent crude LCOQ6, -0.66% hovered below $50 a barrel as traders weighed upbeat oil data from Thursday against the decision by the Organization of the Petroleum Exporting Countries not to impose a production ceiling. WTI crude CLN6, -0.83%  was lower at $48.80 a barrel.
European markets SXXP, -0.57%  gave up earlier gains and were heading south. Asian ADOW, +1.05%  markets saw moderate gains. The Shanghai Composite Index SHCOMP, +0.46%  broke six-straight weeks of losses, gaining 4.2% on hopes mainland Chinese shares could get MSCI acceptance.
Nonfarm payrolls on tap: The U.S. created just 38,000 new jobs in May and hiring in the prior two months was weaker than originally reported.
The unemployment rate fell to 4.7% from 5% as 664,000 people left the labor force in May.
Separately, U.S. trade deficit climbed 5.3% in April to $37.4 billion.
Read: Fed is split into two camps on interest rates
More data are ahead with the Institute for Supply Management nonmanufacturing survey for May and a reading on factory orders for April scheduled for release at 10 a.m. Eastern.
Fed speakers: Speaking in London Friday, Chicago Federal Reserve President Charles Evans said there is a “reasonable case” for holding off increasing the federal-funds rate until core inflation gets above 2% on a sustainable basis.
Fed Gov. Lael Brainard will speak on economic outlook and monetary policy at the Council on Foreign Relations at 12:30 p.m. Eastern.
Stocks to watch: Talen Energy Corp. TLN, -0.75%  soared 18% in premarket on news the independent power producer has agreed to be acquired by private investment company Riverstone Holdings, which will pay $14 a share for each one of Talen that it doesn’t own.
Northstar Asset Management Group Inc., NSAM, +1.15%  Colony Capital Inc. CLNY, -0.33% and Northstar Realty Finance Corp. NRF, -0.15%  have agreed to merge. The deal will create an equity real-estate investment trust with $58 billion of assets under management, the companies said in a statement. Northstar Asset and Northstar Realty were up 7% in premarket.
Wal-Mart Stores Inc. WMT, +0.64%  will test a grocery delivery service with Uber Technologies Inc. and Lyft Inc., and Chief Executive Officer Doug McMillon is expected to discuss the program at the retailer’s annual shareholder meeting on Friday.
Gap Inc. GPS, +2.57%  said late Thursday that sales for May fell 5%, and same-store sales decreased 6%.
Late Thursday, Tribune Publishing Co. TPUB, -1.81%  announced that it was changing its name to tronc Inc. and moving to the Nasdaq from the New York Stock Exchange. The move was met with mockery on the internet.
Teen retailer Five Below Inc. FIVE, +0.40%  on Thursday reported sharp increases in sales and earnings for its fiscal first quarter.
Air carriers United Continental Holdings Inc. UAL, -0.18% and Delta Air Lines Inc. DAL, -2.44% are among those considering bids for Avianca Holdings SA, The Wall Street Journal reported, citing sources.
Twitter Inc. TWTR, +1.20%  and Yahoo Inc. YHOO, +1.36%  executives met to discuss a possible merger several weeks ago, the New York Post reported, citing sources.