Before opening, Dow Jones Industrial Average (INDEX: ^DJI) futures were nosing up by 0.2% in hopes of rebounding from yesterday's 1.3% loss on growing concerns out of Europe. Highlighting the levels of fear surrounding the stock market, yields on 10-year Treasury Notes (^TNX) fell to 1.62% -- a 60-year low -- as investors moved to the safety of fixed income. Oil was poised for its steepest one-month drop in three years, down to $88 per barrel.
Asian markets dropped overnight, but some good news came out of China for Apple (NAS: AAPL) as regulators there approved the sale new iPad. China is Apple's second-largest market. Meanwhile, India's GDP growth dropped sharply to 5.3% in the first quarter, its lowest level in nine years.
Several news items in Europe appeared to be propelling gains over there. Inflation in the eurozone fell to 2.4% in May, leading to speculation that the European Central Bank could cut interest rates, which would make borrowing easier. The unemployment rate in Germany dropped to 6.7%, down from 7% in April. Economic data also revealed that Poland's GDP grew by 3.5% in the first quarter, and Switzerland bucked assumptions of a first-quarter contraction of its GDP expanding by 0.7%. Italy's central bank, meanwhile, predicted a 1.5% drop in its GDP for the year.
Going into tomorrow's all-important Department of Labor unemployment report, we had some disappointing news come out this morning. The ADP reported that nonfarm private-sector jobs increased by a seasonally adjusted rate of 133,000, with essentially all gains coming from the service sector. The figure was an improvement from April's gain, which was revised down slightly to 113,000, but below expectations of 157,000. Initial unemployment claims also jumped by 10,000 last week to 383,000, which was above the 368,000 analysts had predicted. First-quarter GDP was revised down to 1.9% from 2.2%.
One report to look out for later this morning is the Chicago Purchasing Managers Index, which comes out at 9:45 a.m. EDT. The market is expecting a reading of 55, following last month's 56.2. Any number above 50 represents an expansion.
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