Filed under: Before the bell, Earnings reports, Forecasts, Deals, Market matters, Bank of America (BAC), Countrywide Financial (CFC), Amer Intl Group (AIG), Economic data, Oil, Lehman Br Holdings (LEH), Housing, Federal Reserve
Stock futures were mixed early Friday as oil prices spiked to levels not seen in a week on fears the dollar would weaken further. Investors are also awaiting May’s payroll numbers.
U.S. stocks staged a big rally Thursday, ending a three-day losing streak as the Dow climbed over 200 points. Better-than-expected initial jobless claims data and strong sales from several retailing giants namely Wal-Mart Stores Inc. (NYSE: WMT) helped boost sentiment. The Dow Jones Industrial Average ended climbing up 213.79 points, or 1.73%, the S&P 500 gained 26.85 points, or 1.95%, and the Nasdaq composite completed 46 points, or 1.87%, higher.
At 8:30 a.m. EDT, the government will release the non-farm payroll report for Might. Economists anticipate a loss of 60,000 jobs in May according to Briefing.com. Unemployment rate is expected to increase to 5.1% from 5% the month before. Hourly earnings are expected to show an increase of 0.2%. While the expected numbers show continued deterioration of the labor market, despite wages increasing at a lower rate than inflation so far, some could expect a surprise since the ADP report had relatively good numbers. The market will react to the report.
At 10:00 a.m., April wholesale inventories are also due for release.
Meanwhile, oil prices rose back above $130 a barrel, following the biggest single day price rise ever in dollar terms, a gain of $5.49 Thursday. The spike on Thursday came after ECB president said the bank might raise interest rates, which would of course weaken the U.S. dollar.
Meanwhile, home foreclosures soared to a new record.
In corporate news, the Federal Reserve has approved Bank of America Corp. (NYSE: BAC)’s $4 billion purchase of distressed mortgage lender Countrywide Financial Corp. (NYSE: CFC).
The Securities and Exchange Commission is investigating whether American International Group Inc. (NYSE: AIG) overstated the value of credit default swaps linked to subprime mortgages. A criminal investigation could follow, the Wall Street Journal reported.
And staying in financials, Lehman Brothers Holdings Inc. (NYSE: LEH) might pre-announce what may be its first quarterly loss since going public in 1994 as early as next week and it might raise as much as $5 billion also by early next week.
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