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Stock futures fall as jobless claims continue rise

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Traders are looking at a lower open for stocks after the Labor Department said initial filings for state unemployment benefits rose by 16,000 to 442,000 in the latest week, which was much weaker that the 421,000 forecasted by economists. The closely watched four-week average, which smooth out the week-to-week volatility rose to 403,500. The Labor Department said some of the increase in weekly jobless claims were due to seasonal adjustments to account for the Memorial Day holiday.

Most economists view the 400,000 level as a waterline between an improving labor market and weak labor market with the four-week average of 403,500 still indicative that the economy has yet to generate job growth.

S&P futures (sp03m) fell from the 984 level on this morning's weekly jobless claims data and currently trade down 4.5 points at 981.70. NASDAQ futures (nd03m) are lower by 7.50 points at 1,217, while Dow futures (dj03m) are down 40 points at 8,995.

Fair value for the S&P 500 today is $-0.07. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.21 and set for program selling at $-0.98. Fair value for the NASDAQ-100 today is $1.08.

Treasuries are finding buyers in their early trade, with YIELDS lower across the major maturities. The benchmark 10-year YIELD ($TNX.X) is lower by 2.4 basis points to YIELD 3.267%, with the 10-year June futures contract (ty03m) 3/32 to 119'230.

Buying in Treasuries is partially due to the European Central Bank cutting its key interest rate by 50 basis points to 2%.

The move comes amid particular difficulty in Germany, where GDP contracted in the first quarter. The country's unemployment rate maintained its 10.7% percent level in May.

With the euro advancing to all-time highs versus the U.S. dollar, European exports have had a difficult time competing in the U.S. market.

The 50 basis point rate cut out of the ECB has found a bid coming into gold futures this morning on thoughts that monetary policy toward easing on interest rates, to stimulate some inflation, could see gold benefiting longer-term. June gold futures (gc03m) are gaining $4.90 (+1.35%) at $367.50.

Foreign Markets


Hong Kong Hang Seng 9,639 -23.81 -0.25%

Japan Nikkei 225 8,657 +99.37 +1.16%

Taiwan Taiwan Weighted 4,738 +1.29 -0.15%


France CAC 40 3,028 -35.36 -1.15%

Germany DAX 3,040 -39.25 -1.27%

Russia Moscow Times 5,493 -39.81 -0.72%

Switzerland Swiss Market 4,722 -26.20 -0.55%

United Kingdom FTSE 100 4,096 -30.20 -0.73%

Jeff Bailey

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