Stock index futures edged higher on Friday as investors awaited a key report on the labor market to provide direction.
High unemployment remains a big hurdle to a sustainable recovery, and investors are anxious to see improvement. Conflicting reports through the week have caused sentiment to seesaw, with data showing private employers added more jobs than expected last month, but initial claims for jobless benefits unexpectedly rose last week.
Economists polled by Reuters expected the Labor Department report, due at 8:30 a.m. EDT, to show a drop of 65,000 in non-farm payrolls in July as temporary Census Bureau jobs evaporated. Private employers are expected to have added 90,000 jobs.
For a U.S. market that has really been struggling to produce macro data that convinces investors that there's more upside, this a very critically important macro data point today, said Craig Peckham, equity trading strategist at Jefferies & Co in New York.
I think it will go a long way to either sustaining some of the positive momentum conveyed during U.S. earnings season or forcing some second-guessing if it comes as a disappointment.
S&P 500 futures rose 1.9 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 added 14 points, and Nasdaq 100 futures were up 4.25 points.
Stocks have been consolidating for most of the week after rising 10 percent since early July. But if Friday's employment data pushes the S&P 500 to close above its June high, charts show there's little to keep the benchmark from extending the summer rally.
The S&P has been closing in on its intraday June high of about 1,131, which would open the door for a strong gain as charts show little overhead resistance.
U.S.-listed shares of BP Plc
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Kraft Foods Inc
American International Group Inc's
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Stocks edged lower Thursday as an unexpected rise in initial jobless claims and unimpressive July retail sales bruised sentiment.
(Editing by Padraic Cassidy)