The major U.S. index futures are currently pointing to a lower open on Friday, with stocks likely to extend the downward trend seen over the past several sessions.
Concerns about the outlook for interest rates may continue to weigh on the markets following the release of a closely watched Labor Department report showing much stronger than expected job growth in the month of December.
The Labor Department said non-farm payroll employment surged by 216,000 jobs in December after climbing by a downwardly revised 173,000 jobs in November.
Economists had expected employment to increase by 170,000 jobs compared to the addition of 199,000 jobs originally reported for the previous month.
Meanwhile, the report said the unemployment rate came in at 3.7 percent in December, unchanged from November. Economists had expected the unemployment rate to inch up to 3.8 percent.
The stronger than expected jobs data may add to recent fears the Federal Reserve is not likely to begin lowering interest rates as soon as previously anticipated.
A jump by treasury yields in response to the data may also weigh on Wall Street, with the yield on the benchmark ten-year note climbing above 4.0 percent.
Stocks turned in a lackluster performance throughout much of the trading session on Thursday before eventually ending the day mostly lower. The Nasdaq and the S&P 500 finished the session in negative territory, although the narrower Dow closed slightly higher.
The major averages moved to the downside going into the close, with the Nasdaq and S&P 500 hitting new lows of the session. The Nasdaq slid 81.91 points or 0.6 percent to 14,510.30 and the S&P 500 fell 16.13 points or 0.3 percent at 4,688.68.
Meanwhile, the Dow inched up 10.15 points or less than a tenth of a percent to 37,440.34 even though shares of Walgreens (WBA) plunged after the drug store chain slashed its quarterly dividend.
The lower close on Wall Street came as traders expressed caution ahead of the release of the Labor Department’s closely watched monthly jobs report.
Ahead of the Labor Department report, payroll processor ADP released a report showing private sector employment in the U.S. increased by more than expected in the month of December.
ADP said private sector employment climbed by 164,000 jobs in December after rising by a downwardly revised 101,000 jobs in November.
Economists had expected private sector employment to grow by 115,000 jobs compared to the addition of 103,000 jobs originally reported for the previous month.
A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits fell by much more than expected in the week ended December 30th.
The Labor Department said initial jobless claims declined to 202,000, a decrease of 18,000 from the previous week’s revised level of 220,000.
Economists had expected jobless claims to edge down to 216,000 from the 218,000 originally reported for the previous week.
Energy stocks came under pressure over the course of the session, as the price of crude oil turned lower after seeing early strength.
Reflecting the weakness in the sector, the Philadelphia Oil Service Index plunged by 2.2 percent and the NYSE Arca Oil Index tumbled by 1.8 percent.
Notable weakness also emerged among retail stocks, as reflected by the 1.0 percent drop by the Dow Jones U.S. Retail Index.
On the other hand, airline stocks regained ground following recent weakness, driving the NYSE Arca Airline Index up by 1.1 percent.