Lower opening seen on Europe, jobs
U.S. stocks are expected to open lower, pulled down by declines in Europe where mining, bank and energy stocks were on the defensive. In addition, a private employment survey this morning came in weaker-than-expected, which could heighten worries about the big jobs report coming up Friday. The Dow is expected to open about 125 points lower, while the Russell 2000 (NYSE:IWM) is seen down about 1.2% near 508.50.
The ADP National Employment Report showed a startling drop in jobs of 693,000, way above the forecast for a decline of 480,000. The initial response to the report was a drop in stock index futures and a bounce in credit markets.
Crude oil prices slipped from flat levels to a loss of about $0.70 a barrel on news that Israeli and Palestinian leaders have accepted a truce. Energy and mining stocks were lower overseas and could see selling interest early today in U.S. action. Top aluminum producer Alcoa Inc. (NYSE:AA) announced plans to slice some 13,500 jobs and reduce output, which sparked a slide in AA shares in pre-market trading.
Indian outsourcing firm Satyam Computer Services Ltd. (NYSE:SAY) collapsed overnight as the company’s chairman stepped down and said that profits for the firm have been overstated for years. SAY stock was off some 80% in pre-market trading. This is the same firm that saw a massive pullback in mid-December when the chairman tried to use the company funds to purchase interest in his son’s infrastructure properties.
Looking at the chart picture, the Russell finished Tuesday near a test of logical resistance at 514.50 but appears set to retreat from that zone early today. A pullback should find support near 508.00, then down at 496.50 and 491.00. On the upside, any push back above 514.50 would clear the way for a run toward 525.00.
