Got job, fear?
U.S. markets look ahead to job report
By Christopher Noble , CBS MarketWatch.com
Last Update: 4:29 AM ET Jul 31, 2004
SAN FRANCISCO (CBS.MW) -- U.S. stocks are likely to trade skittishly next week, buffeted by high oil prices and concerns over the July employment report.
Uncertainties over the tight U.S. presidential race, possible terror attacks and the pace of interest rate increases will also make it hard for the stock market to make a determined break from the range it has held over the last few months.
"You'd have to be pretty enthused to think it's going to break out," said Alfred Kugel, senior investment strategist at Stein Roe Investment Counsel.
Investors will be wading through a steady flow of economic indicators all week but Friday's payroll report will offer the first significant look at third-quarter conditions.
Analysts surveyed by CBS MarketWatch expect, on average, that the U.S. economy will have added 230,000 jobs in July, after a gain of 112,000 in June. The unemployment rate is expected to remain flat at 5.6 percent.
"If the payrolls number comes in toward the mid 200s, we could see stock prices move back up to the middle of the range we've had this year instead of sitting here at the bottom." Kugel said.
The number will help shape the performance of financial markets and the speed at which the Federal Reserve raises interest rates, with its next meeting scheduled Aug. 10. Job creation could even influence the race for the White House, analysts said.
"The whole market will be very sensitive to a number below consensus because it will call into question whether the Fed should tighten at the August meeting," said Tom McManus, chief equity strategist at Banc of America Securities.
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