Stocks were set to open sharply lower on Friday after the June payrolls report fell short of expectations and dashed hopes the economic recovery had regained speed.
U.S. employment growth ground to a halt last month, with employers hiring a mere 18,000 workers, the Labor Department said, the fewest number in nine months and far below economists' expectations for a 90,000 rise.
The unemployment rate rose unexpectedly to 9.2 percent, the highest since December, from 9.1 percent in May.
Many economists had raised their non-farm payrolls forecasts on Thursday after a stronger-than-expected reading on private hiring from payrolls processor ADP, which prompted a rally in stocks on Thursday.
Very disappointing and more from a positioning standpoint where some shorts had thrown in the towel over the last several days and especially yesterday, said Michael Marrale, managing director and head of sales trading at RBC Capital Markets in New York.
I would expect them to re-engage on the back of this number, Marrale said, suggesting further heavy selling.
S&P 500 futures tumbled 21 points and were well below 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 dropped 148 points, and Nasdaq 100 futures lost 30.25 points.
Data also expected on Friday includes wholesale inventories for May at 10 a.m. Economists forecast May inventories to rise 0.7 percent versus a 0.8 percent increase in April.
President Barack Obama told top U.S. lawmakers on Thursday he would not sign a short-term extension of the U.S. debt ceiling and said negotiators would work through the weekend on a deal to avoid a debt default.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)