Stock futures pull back ahead unemployment data

Stocks headed toward a lower open Friday as investors await the government’s September jobs report.

Stock futures were down after the market began the fourth quarter with its worst drop in three months, sending the Dow Jones industrials down 203 points Thursday. Investors are having doubts about the economic recovery and whether they should extend this year’s rally.

They will get news about unemployment and the number of jobs lost last month when the Labor Department issues its report at 8:30 a.m. Eastern time.

Economists don’t expect an improvement in the unemployment rate anytime soon. Economists surveyed by Thomson Reuters project the unemployment rate rose to 9.8 percent from 9.7 percent in August.

Employers are expected to have cut 180,000 jobs in September, down from 216,000 in August and the fewest since August 2008.

Unemployment has been one of the market’s biggest concerns throughout the recession. Most economists expect the rate to top 10 percent by early next year.

Ahead of the opening bell, Dow Jones industrial average futures fell 33, or 0.4 percent, to 9,438. Standard & Poor’s 500 index futures lost 3.30, or 0.3 percent, to 1,024.10, while Nasdaq 100 index futures fell 5.25, or 0.3 percent, to 1,665.25.

Corporate news had little impact on the market.

Struggling CIT Group Inc. said late Thursday it launched a debt restructuring program it hopes will trim at least $5.7 billion from its balance sheet. New York-based CIT, one of the nation’s largest lenders to small and midsize businesses, is asking bondholders to approve a prepackaged reorganization plan in case it is forced to file for Chapter 11 bankruptcy protection.

The market is also awaiting the Commerce Department’s factory orders for August. The report, which looks at orders to U.S. factories, likely posted a small increase in August as the manufacturing sector struggles to emerge from the recession.

Economists expect factory orders rose 0.7 percent in August following a 1.3 percent gain in July. The report is due at 10 a.m. EDT.

Disappointing manufacturing data from the Institute for Supply Management reignited worries Thursday that any economic recovery may be slow and difficult.

Global markets remain modestly lower.

Japan’s Nikkei stock average fell 2.47 percent. In afternoon trading, Britain’s FTSE 100 was down 0.8 percent, Germany’s DAX index was down 0.7 percent, and France’s CAC-40 was down 1.2 percent.

Bond prices were mixed Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.16 percent from 3.18 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.11 percent from 0.09 percent late Thursday.

The dollar was mixed other major currencies, while gold prices fell.