* S&P 500 on track for biggest weekly decline of 2013
* Energy shares likely to drop, oil slumps 1 percent
* F5 Networks plunges in premarket after weak outlook
* Futures down: Dow 125 pts, S&P 15.6 pts, Nasdaq 26.5 pts
By Ryan Vlastelica
NEW YORK, April 5 U.S. stock index futures
pointed to a drop of more than 1 percent at the open on Friday,
following a payroll report that was much weaker than expected,
the latest in a series of reports to indicate that economic
growth may be losing momentum.
About 88,000 jobs were added in March, less than half the
forecast 200,000, though the unemployment rate dipped to 7.6
percent from 7.7 percent.
The report follows similarly disappointing reads on the
manufacturing and services sector, as well as other poor labor
The data added to "concerns we had about prices having
gotten ahead of themselves, which creates the potential for even
further declines," said Bruce McCain, chief investment
strategist at Key Private Bank in Cleveland, Ohio.
The decline in futures indicates that equities will extend
their recent retreat. The S&P is down 0.6 percent so far this
week, on track to be its worst of 2013.
S&P 500 futures fell 15.6 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures lost 125
points and Nasdaq 100 futures sank 26.5 points.
If the S&P closes down on the week, it will be only the
third weekly loss this year for the benchmark index, which has
struggled to surpass an intraday record high of 1,576.09. The
index is up about 9.4 percent so far this year and has so far
gone without a significant pullback, leading many to call for
The gains have been partially fueled by a bond-buying
program by the Federal Reserve, which has been credited with
supporting equity prices. Measures from central banks around the
world have also helped, and on Thursday, Wall Street rose after
the Bank of Japan announced aggressive policies to jump-start
The payroll report "should reinforce the Fed's recent bond
buying activity; but that may not be enough to turn today's
bearish feelings in the markets," said Todd Schoenberger,
managing partner at LandColt Capital in New York.
Energy shares are likely to be pressured, as the group is
closely tied to economic growth expectations. Crude oil fell for
a third straight day, dropping 1.1 percent and extending its
decline for the week to more than 5 percent. Chevron Corp
has lost 2.6 percent over the past two weeks.
Overseas, European shares slumped 1.7 percent,
falling to a one-month low on concerns over growth.
Earnings forecasts have declined heading into first-quarter
reports, due to be kicked off next week by Alcoa. S&P 500
earnings are expected to have risen just 1.6 percent from a year
ago, according to Thomson Reuters data, down from 4.3 percent
forecast in January.
Late Thursday, F5 Networks Inc forecast
second-quarter earnings and revenue that were well below
expectations. Its shares slumped 17 percent to $74.65 in
Geopolitical tensions will remain in focus after North Korea
placed two of its intermediate range missiles on mobile
launchers and hid them on the east coast of the country, South
Korean media reported on Friday.