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Key jobs report shows strong pace of hiring in March
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First Republic slips as bank suspends preferred stock
dividend
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Semiconductor stocks up; Samsung plans to cut chip output
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Futures down: Dow 0.36%, S&P 0.52%, Nasdaq 0.82%
(Adds analyst comment, updates prices)
By Sruthi Shankar and Ankika Biswas
April 10 (Reuters) - U.S. stock indexes were on track
for a lower open on Monday on growing concerns that the Federal
Reserve will continue to hike interest rates after Friday's jobs
data highlighted a still-strong labor market.
Futures tied to the tech-heavy Nasdaq 100 led losses
after the long weekend, with growth stocks including Apple Inc , Amazon.com Inc and Microsoft Corp slipping between 0.7% and 1.3% in premarket trade.
U.S. employers maintained a strong pace of hiring in March,
data on Friday showed, pushing the unemployment rate down to
3.5% and raising odds of the Fed hiking rates one more time next
month.
"Investors remain very optimistic that the (rate) increases
will come to an end, but the data which the Fed is so dependent
on seems to leave room for at least a 25-basis point increase
one more time," Rick Meckler, partner at Cherry Lane
Investments, said.
"One has to step back and look at a bigger picture than just
these week-to-week market battles over data. It's going take a
few more months to see whether the economic slowdown continues
or consumer spending comes back and once again rescues us from a
true recession."
A string of reports last week, including weak private
payrolls and job openings data, pointed to slowing labor demand
and raised hopes of the Fed pausing its market-punishing rate
hikes amid the recent banking sector turmoil.
However, the odds of a 25-basis point rate hike by the Fed
in May rose to over 65% after the jobs data on Friday, according
to CME Group's Fedwatch tool, from 57% last week.
The focus this week will shift to U.S. consumer and producer
prices data, minutes from the Fed's March meeting and quarterly
results from big U.S. banks including JPMorgan Chase & Co , Citigroup Inc and Wells Fargo & Co .
Analysts expect S&P 500 companies' profits to shrink 5.2% in
the first quarter, as per Refinitiv IBES estimates, a reversal
from the 1.4% growth forecast at the start of the year.
At 08:21 a.m. ET, Dow e-minis were down 122 points,
or 0.36%, S&P 500 e-minis were down 21.5 points, or
0.52%, and Nasdaq 100 e-minis were down 107.75 points,
or 0.82%.
Tesla Inc fell 2.6% after the electric-vehicle
maker cut prices in the United States between 2% and nearly 6%,
a move that analysts cautioned could hurt profitability.
First Republic Bank fell 4.1% as the lender said on
Friday it plans to suspend payments of quarterly cash dividends
on its preferred stock "as a measure of prudent oversight".
Shares of regional banks slipped after Fed data on Friday
showed overall credit from U.S. banks declined by a record of
more than $120 billion in the latest week, on a nonseasonally
adjusted basis.
Western Alliance Bancorp and PacWest Bancorp were down 1.4% and 2.5%, respectively.
Pioneer Natural Resources Co jumped 6.7% following a
report that Exxon Mobil Corp held preliminary talks with
the company about a possible acquisition of the shale oil
producer.
Semiconductor stocks such as Micron Technology Inc and Western Digital Corp gained 5.5% and 4.7%,
respectively, following Samsung Electronics Co Ltd's plans to cut chip production.
(Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru;
Additional reporting by Medha Singh; Editing by Varun H K and
Shounak Dasgupta)
