US STOCKS-S&P 500 set for muted open as strong jobs report sparks inflation worries

  • 8/6/2021
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* July nonfarm payrolls rises by 943,000; unemployment rate falls * Zynga dives on bleak bookings forecast, acquisition plans * Futures: Dow up 0.29%, S&P flat, Nasdaq down 0.43% (Adds comments, updates prices throughout) Aug 6 (Reuters) - The S&P 500 was set for a muted open on Friday, as a solid rise in jobs in July sparked concerns of higher inflation at a time when the Delta variant of the coronavirus has cast a shadow over a broader economic rebound. The Labor Department’s report showed nonfarm payrolls increased by 943,000 jobs last month amid demand for workers in the labor-intensive services industry, higher than economists’ expectation of 870,000. “This good news brings pain for the bond market; the dollar will strengthen and yields will go up and that could cap stocks a bit,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “This report indicates that wage inflation is picking up, it certainly indicates inflation has more staying power and is not necessarily temporary.” The much-awaited jobs numbers dovetail with data that showed a further decline in U.S. unemployment claims last week and strong corporate earnings reports, which lifted the Nasdaq and S&P 500 indexes to record closes on Thursday. Although all the three main indexes are set to end the week with nominal gains following a stellar corporate earnings season, fears of higher inflation, leading to a sudden tapering in monetary policy have hurt sentiment. Focus now turns to a meeting of Federal Reserve leaders in Jackson Hole, Wyoming, to discuss policy and decide future stimulus strategy. At 9:04 a.m. ET, Dow e-minis were up 103 points, or 0.29%, S&P 500 e-minis were up 1.75 points, or 0.04%, and Nasdaq 100 e-minis were down 65 points, or 0.43%. On the earnings front, American International Group Inc rose 2.3% in premarket trading as it beat second-quarter profit estimates on Thursday. Zynga Inc tumbled 15.1% after issuing a disappointing forecast for bookings and announcing a potential acquisition worth over half a billion dollars. U.S.-listed shares of ride-hailing service Didi Global Inc added 5.8% as Bloomberg News reported it was considering giving up control of its valuable data as part of efforts to resolve a Chinese regulatory probe. Corteva Inc rose 5% after raising its net sales forecast for the year. Analysts expect second-quarter profit growth of 92.9% for S&P 500 companies, according to IBES data from Refinitiv. Of the 427 companies in the index that have reported earnings so far, 87.6% beat analyst expectations, the highest on record. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila and Arun Koyyur) Our Standards: The Thomson Reuters Trust Principles.

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