Wall Street Poised For Weak Start On December Jobs Data

January 9, 2009 7:38 a.m. EST

New York, NY (AHN) - Futures were moving down on rising expectations that the U.S. jobs report will present a grimmer outlook of the American economy that is in its worst economic recession since the Great Depression.

Stocks on Wall Street are likely to open lower and remain weak on Friday as markets across the globe dropped into red territory amid hopes that the economic downturn would hit bottom in the current fiscal year and start rebounding.

The U.S. Labor Department is scheduled to release data on December's nonfarm payroll in a report at 8:30 a.m. Eastern in Washington.

Early this week, ADP report showed that nonfarm payrolls in the month of December were down by as much as 700,000 on average basis.

The market analysts on Wall Street are expecting to show a drop of 550,000 jobs last month, with the unemployment rate to jump to a 15-year high to 7 percent in December from 6.7 percent in November.

At 7:15 a.m. EDT in New York, S&P futures were trading down by 2.40 points or 0.26 percent to 904.30 points, NASDAQ futures was moving lower by 5.50 points or 0.44 percent at 1,244.00 points.

At the same time, the Dow was trading down by 33.00 points or 0.38 percent at 8,663.00 points.

In economic report, the Census Bureau is expected to release data after the opening bell on wholesale inventories that may fall by 0.9 percent in November after dropping 1.1 percent in October, easing concerns about the manufacturing sector.

Shares of General Motors Corp. (NYSE: GM) dropped by 2.7 percent to $3.93 in Frankfurt trading after the company's European segment showed sales drop of 14 percent in December.

Investors will closely look at the fourth-quarter results to be released by troubled homebuilder KB Home (KBH), which is expected to post loss of $1.24 per share before the bell.

Oil continued to trade below $43-a-barrel mark, signaling that the drivers in major economies continue to lower their demand for crude and gasoline despite mounting tension in the Middle East.

A light sweet crude-oil futures for February delivery was moving up by 50 cents to $42.20 a barrel in electronic trading on Friday. The prices have been traded at multi-year low levels in the last few weeks.

On Thursday, February crude-oil futures dropped by as much as 93 cents, to $42.00 a barrel on the New York Mercantile Exchange in overnight trading on negative sentiment.

In currency trading, the yen bolstered as it changed hands at 91.08 yen per U.S. dollar in Asia on Friday, after it closed at 90.59 yen per dollar late Thursday in New York.