U.S. stocks are poised to open lower Friday, ahead of the closely watched jobs report.
NEW YORK (TheStreet) -- U.S. stocks were poised to open lower Friday, ahead of the closely watched jobs report, as worsening economic data from Europe and China triggered a global market selloff.
Demand for safe-haven assets rose amid heightened risk aversion, pushing the dollar and the 10-year Treasury note higher. In Germany, the yield on two-year bonds turned negative for the first time, indicating that investors were essentially paying for capital protection.
Futures for the Dow Jones Industrial Average were down by 102 points at 12,281. Futures for the S&P 500 were lower by 14 points at 1295. Futures for the Nasdaq were dropping 26 points to 2,498.
Global markets were trading weaker Friday after China posted its slowest manufacturing growth in over a year. The Purchasing Managers' Index fell to 50.4 in May from 53.3 in April.
Japan's Nikkei shed 1.2% in Friday's trading, while Hong Kong's Hang Seng Index declined 0.4%.
European shares were trading lower as well amid reports that showed a further slowdown in manufacturing activity and rising unemployment in the 17-nation euro zone.
The Purchasing Managers' Index for the euro zone declined to 45.1 in May from 45.9 in April, marking a three-year low. Unemployment in the region hovered at 11%, with 17.1 million people now without jobs.
The FTSE in U.K. was losing 0.7%, while Germany's DAX was plunging 2.5%.
Investors are hoping for better news out of the U.S. economy on Friday.
At 8:30 a.m. EDT, the Labor Department will release its crucial non-farm payrolls report.
Expectations have been lowered after a raft of economic data on Thursday showed evidence of a disappointing pace of job creation and slower economic growth than initially thought.
The economy is likely to have added 150,000 jobs in May, up from a paltry 115,000 in April, according to economists surveyed by Bloomberg. Estimates ranged from as low as 95,000 to as high as 206,000.
The private sector likely added 164,000 jobs, according to consensus estimates. The ADP report said Thursday that companies added only 133,000 jobs during the month.
The unemployment rate is expected to remain steady at 8.1%.
Investors will have other economic data to digest as well on Friday, though none as market-moving as the employment report.
At 8:30 a.m., the Bureau of Economic Analysis will release personal income and spending numbers.
At 10 a.m., the Institute for Supply Management will release the manufacturing index for May. Consensus expects manufacturing activity to have dipped to 54 from 54.8 in April.
Also at 10 a.m., the Commerce Department will release construction spending data for April. Meanwhile, the morning will feature auto and truck sales.
Bad news on the jobs front is likely to raise concerns about the resilience of the U.S. economy to overseas pressures and could revive expectations that the Federal Reserve will step in with more quantitative easing.
However, some market experts believe that a third round of QE is unlikely.
"The labor market has come off the boil a little since spring arrived, but the slowdown is much more modest than the one we saw last year," Paul Ashworth, chief U.S. economist at Capital Economics, wrote earlier on Thursday following the ADP report.
"The Fed only signed off on last September's Operation Twist after the initial estimate released early in that month suggested that payrolls had not increased at all in August. There's a big difference between zero and 133,000. QE3 is far from the near certainty that some commentators seem to believe."
Commodities markets were lower Friday. July oil futures were sharply lower by $1.79 at $84.74 a barrel and August gold futures were slipping $8.8 to $1,555.40 an ounce.
Meanwhile, the benchmark 10-year Treasury was higher by 8/32, lowering the yield to 1.535% and the greenback rising 0.3%, according to the dollar index.
In corporate news, BP said Friday it has received "unsolicited indications of interest" for its 50% stake in TNK-BP, Russia's third-largest oil producer.
BP's stake in TNK-BP could be worth more than $30 billion, according to The Wall Street Journal.
Wal-Mart (NYSE:WMT) holds its annual shareholders' meeting Friday amid calls for Wal-Mart's CEO and chairman to be removed from the board following a bribery investigation in Mexico.