By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Stock exchanges closed for Good Friday holiday
NEW YORK (MarketWatch)--U.S. stock-index futures declined sharply Friday after the March jobs report--released during a holiday-shortened trading session--came in much weaker than expected.
The data showed nonfarm payrolls (http://www.marketwatch.com/story/us-jobs-growth-in-march-slumps-to-15-month-low-2015-04-03)rose by just 126,000 in March, far below the consensus estimate of 243,000 produced by a MarketWatch survey of economists. In addition, payroll gains for February and January were revised lower by 69,000 jobs.The unemployment rate, meanwhile, was unchanged at 5.5%.
After weak jobs report, a June Fed hike seems remote (http://www.marketwatch.com/story/after-weak-jobs-report-a-june-fed-hike-seems-remote-2015-04-03)
All major U.S. stock exchanges, including the New York Stock Exchange and Nasdaq, are closed on Friday (http://www.marketwatch.com/story/when-do-markets-close-for-good-friday-2015-03-27). London markets and major exchanges in Europe were also closed and will remain shut on Monday. Regular U.S. trade reopens on April 6.
After the release of the jobs report at 8:30 a.m. futures fell sharply. The S&P 500 futures (ESM5) fell 19.75 points, or 1% to 2,039.7, while those for the Dow Jones Industrial Average (YMM5) dropped 165 points, or about 1%, to 17,511. Futures for the Nasdaq-100 (NQM5) lost 43.75 points, or 1%, to 4,263.5. Futures for most of the major averages had been near flat just ahead of the report. Futures trading closed at 9:15 a.m. Eastern Time on Good Friday.
"The jobs report reflects a general theme that the first quarter did not live up to expectations," said Carl Tannenbaum, chief economist for Northern Trust.
"The weakness stems from weather-related depression, as seen in soft construction job gains. The drastic correction that the energy industry is experiencing has also affected job gains there, as we saw declines in energy and mining," Tannenbaum noted.
Despite the holiday-abbreviated session, the disappointing jobs report is likely to set the tone for trading in U.S. stock markets Monday.
"You're going to have plenty of opportunity to get a reaction--and it is probably going to be a truer reaction--in the market on Monday," Art Hogan, chief market strategist at Wunderlich Securities, said Thursday.
JJ Kinahan, chief derivatives strategist at TD Ameritrade said investors should take Friday's market reaction with a grain of salt.
"The move in futures markets...is likely very exaggerated, as there is nothing on the other side of the trade. The bond market reaction indicates that traders really wanted safety going into the weekend in light of very disappointing jobs report," Kinahan said.
Read: How traders may navigate a jobs report on Good Friday (http://www.marketwatch.com/story/how-traders-may-navigate-a-jobs-report-on-good-friday-2015-04-02)
The disappointing jobs report sent government bond yields (http://www.marketwatch.com/story/weak-jobs-report-sparks-flight-to-safety-in-treasurys-2015-04-03) and the dollar (http://www.marketwatch.com/story/dollar-bides-time-against-rivals-ahead-of-us-jobs-data-2015-04-03) sharply down. The yield on the 10-year note sank 9 basis points to 1.82% while the U.S. dollar tumbled (http://www.marketwatch.com/story/dollar-bides-time-against-rivals-ahead-of-us-jobs-data-2015-04-03)against the euro (EURUSD), sending the single currency up 1.1% to $1.099.
U.S. stocks closed out the holiday-shortened week with mostly modest gains on Thursday (http://www.marketwatch.com/story/us-stocks-futures-point-to-third-day-of-losses-ahead-of-easter-weekend-2015-04-02), leaving the S&P 500 (SPX) up 7.27 points, or 0.4%, at 2,066.96 and up 0.3% for the week.
Also read: Why aren't workers getting more McWage growth? (http://www.marketwatch.com/story/why-more-arent-seeing-mcwage-growth-2015-04-02)