U.S. stock futures trade higher after jobs report

By Daniel | August 1, 2008

U.S. stock futures trade higher after jobs report

By Steve Goldstein, MarketWatch

Last Update: 8/1/2008 8:37:00 AM

LONDON (MarketWatch) — U.S. stock futures traded a bit higher Friday as not as
many jobs were lost in July as economists predicted, though a $15.5 billion loss
from General Motors tempered gains.

S&P 500 futures rose 3.6 points to 1,270.30 and Nasdaq 100 futures rose 2.5
points to 1,856.50. Dow industrial futures rose 46 points.

U.S. stocks stumbled on Thursday, with a big rise in jobless claims taking the
air out of the market. The Dow industrials fell 205 points, the Nasdaq Composite
dropped 4 points and the S&P 500 lost 16 points.

Nonfarm payrolls fell for the seventh straight month in July while the
unemployment jumped to 5.7%, a four-year high, the Labor Department reported
Friday.

Nonfarm payrolls fell by 51,000 in July, led by losses in manufacturing,
construction, retail and temporary help. Since December, 463,000 jobs have been
lost, the strongest signal that the economy is in a recession. Economists
surveyed by MarketWatch expected payrolls to shrink by 70,000 and for the
unemployment rate to rise to 5.6% from 5.5% in June.

Also out is the Institute of Supply Management’s manufacturing index for July,
which is expected to edge back above the 50 level indicating expansion.

A similar poll in China slumped to its worst reading ever, falling below the
50-level. A European gauge of manufacturing was below 50 for the second month in
a row.

The dollar slipped 0.1% to 107.68 yen though it rose vs. the euro. Oil futures
slipped $1.34 to $122.74 a barrel.

General Motors (GM) shares dropped 8% as its adjusted loss for the second quarter
came in worse than analysts had forecast. GM, as well as BMW, took provisions for
cars returned to them after expiring leases.

U.S. auto sales for July also are due for release, in what J.D. Power &
Associates estimates will be the worst July since 1992.

Elsewhere, Elan (ELN) shares fell 41% and Biogen Idec (BIIB) lost 25% after the
companies said their multiple sclerosis drug Tysabri was linked to two new cases
of a rare and often fatal brain inflammation.

The drug had been taken off the market briefly after its 2004 Food and Drug
Administration approval after three deaths from PML had been linked to the drug.
Tysabri was allowed back on the market in 2006 after no other cases had been
identified.

Schering-Plough (SGP) traded lower in pre-market trade as the FDA gave it a
“not-approvable” letter for Sugammadex, an injection to reverse muscle relaxation
during general anesthesia.

Overseas, the Nikkei 225 ended 2.1% lower in Tokyo and the FTSE 100 eased 0.1% in
London.

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