U.S. Stock-Index Futures Are Little Changed Before Payrolls Data

by Sofia Horta E Costa

Photographer: Luke Sharrett/Bloomberg

(Bloomberg) -- U.S. stock-index futures were little changed, with equities heading for their sixth weekly loss of the year, as investors awaited a government jobs report.
Contracts on the Standard & Poor’s 500 Index expiring in March slipped less than 0.1 percent to 2,099.3 at 7:27 a.m. in New York. The equity gauge pared its weekly drop on Thursday to 0.2 percent amid corporate deals. Dow Jones Industrial Average futures dropped 9 points, also less than 0.1 percent, to 18,111 today.
“Although the labor market is showing signs of strength, the U.S. economy has lost momentum in the past months,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit in Hellerup, Denmark. “I’m still quite bullish on the outlook for U.S. growth, but a lot of it has been priced in.”

The S&P 500 rose to fresh records four times in February, i
ts best month since October 2011, even as Citigroup Inc.’s economic surprise index showed data have been missing projections by the most since July 2012. Valuations are at five-year highs, and the equity benchmark is trailing all but two of the 24 developed-market indexes this year.
Labour Department data at 8:30 a.m. in Washington will show employers added 235,000 workers to nonfarm payrolls in February, economists projected. The unemployment rate probably dropped to 5.6 percent, matching the lowest level in more than six years.

Fed Pledge

The Federal Reserve has pledged patience on increasing borrowing costs, even as the economy improves. Fed Bank of San Francisco President John Williams, who votes on policy this year, said late Thursday that mid-year may be time for a “serious discussion” about raising interest rates as the labor market nears full employment and inflation rebounds. The central bank next meets on March 17-18.
“The Fed is behind the curve because rates are just too low,” said Knuthsen. “It adds a layer of confusion saying that we have a really strong economy, but it’s not quite strong enough.”
Among stocks moving on corporate news, Bank of America Corp. added 2.2 percent in premarket New York trading after Fed stress test results showed the lender improved in every capital measure since last year. Goldman Sachs Group Inc. slipped in late trading after the tests showed it narrowly passed the minimum for total risk-based capital, potentially restricting its room to return capital to shareholders.
Staples Inc. climbed 0.6 percent. The world’s largest office-supplies retailer posted adjusted fourth-quarter earnings that exceeded analysts’ estimates.
Gap Inc. retreated 1.3 percent after the clothing retailer posted a 4 percent drop in February sales. Analysts had predicted a gain of 1.3 percent for last month.