U.S. stock futures were slightly lower this morning, indicating a flat to mildly down open on Wall Street. However, all this could change when non-farm payroll is reported an hour before the opening bell. While investors generally expect a rate cut the next Federal Reserve meeting on Tuesday, December 11, it is the size of the cut that may be decided following the labor report due in an hour.Yesterday, U.S. stocks continued their rally as the White House offered a plan to aid the ailing subprime mortgage market and curb home foreclosures. The Dow industrials rose 174 points, or 1.3%, the S&P 500 added 22 points, or 1.5%, and the Nasdaq Composite rose 42 points, or 1.6%.
Economic data will be the focus this morning and into the trading session:
At 8:30 a.m. EST, November non-farm payroll will be reported. Economists expect the labor market to show signs of softness in November. Still, on Wednesday, Associated Data Processing Inc. showed a bigger surge in private-sector hiring and projected that 189,000 jobs were created in November, much higher than what economists have been expecting. This report be a better indication of what's to come this morning. According to Briefing.com, economists are expecting an addition of 70,000 jobs last month, a much lower figure than that 166,000 added jobs shown in October. [Economists surveyed by Thomson predict a 100,000 addition.]
Along with the report, unemployment rate will be released and is expected to inch up to 4.8% in November, from 4.7% the month before. Hourly earnings is also expected to be higher that the 0.2% rate reported in October and come in at 0.3% increase.
At 10:00 a.m., Michigan Consumer Sentiment is due and is expected to edge lower. Another indicator of consumer confidence was released, the RBC Cash Index. It showed confidence at 65.9 in early December after hovering close to a reading of 64 in November, which marked the worst showing in two years. Housing troubles, a credit crunch, high energy prices and turbulence on Wall Street continue to make people uneasy about the economy and their own financial situations as indicated by the small increase in the index. Yet, the direction, at least, seems healthy.
Strong readings will likely boost stocks as recently investors feel that despite readings that ease concerns of a U.S. recession, the Fed may still cut rates this coming Tuesday.
Overseas, Asian stocks were mixed and European shares advanced.
In corporate news:
Palm Inc. (NASDAQ: PALM) are taking a beating in premarket trading, down over 17% after the company said it expects to post a loss in its fiscal second quarter.
Macrovision Corp. (NASDAQ: MVSN) agreed to buy Gemstar-TV Guide International Inc. for $2.8 billion in cash and stock.
News Corp. (NYSE: NWS) promoted James Murdoch to run the operations in Europe and Asia, putting him in line to succeed his father, Rupert Murdoch.
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