U.S. stock index futures pointed to a mixed open Monday as investor worries about the weakening economy were alleviated following the recovery in the jobs data in July.
The futures on the Dow Jones Industrial Average were down 0.10 percent, those on the Standard & Poor’s 500 index were up 0.02 percent, while the ones on the Nasdaq 100 index went up 0.25 percent.
On Friday, the U.S. markets rose as investor sentiment went up after the July job report of the Bureau of Labor Statistics showed that the economy added more jobs than expected. The 163,000 increase in the nonfarm payrolls in July eased fears of the U.S. economy following Europe into recession. It was expected to increase by 100,000 in July, up from 80,000 in June.
The Dow Jones Industrial Average rose 1.69 percent, the S&P 500 Index climbed 1.9 percent and the Nasdaq Composite Index was up 2 percent.
The jump in the payrolls reduced investor worries about the recovery of the pace of jobs. Meanwhile, an increase in the unemployment rate kept alive hopes of more Fed quantitative easing. The unemployment rate rounded up to 8.3 percent in July, up from 8.2 percent in June.
The key development in the statement released after last week’s Federal Open Market Committee meeting was the change in the stance by the Fed from being prepared to take further action as appropriate, to stating that it will closely monitor the incoming information on economic and financial developments and will provide additional accommodation as needed.
“The Fed sent a pretty strong signal last week that if the incoming data remain as weak as they have been recently then it would act at the next FOMC meeting in mid-September. Given that the data released last week showed there is little chance of a rebound in economic growth in the third quarter, we now think that the Fed will take more action. A third round of asset purchases (QE3) is still the most likely option,” Capital Economics said in a note.
The main European indices fell after investor concerns on the lack of stimulus measures from the ECB to revive economic growth. London’s FTSE 100 was down 10.27 points, Germany's DAX 30 Index fell 2.02 points and France's CAC 40 dropped 10.16 points.
Most of the Asian stocks were up following global cues. The market confidence turned positive on the encouraging news from the U.S. that the economy was regaining momentum to a certain extent.