Stocks were set for a lower open on Friday after data showed the economy shed far more jobs than expected last month, exacerbating worries the path to economic recovery would be rocky.

Futures dropped sharply following the report and indicated a decline of close to 1 percent at the open.

Employment in July fell for a second straight month as more temporary government census jobs ended. Private employment, considered a better indicator of the health of the labor market, also rose less than expected.

High unemployment remains a big hurdle to a sustainable recovery, and investors are anxious to see stable job market. Economic data lately has pointed to a more sluggish recovery than expected, causing investors to second-guess the economic outlook.

What this tells me is that we have a stagnant economy, said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. We're not creating jobs, and we should be at this point.

S&P 500 futures fell 9.2 points and were 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 71 points, and Nasdaq 100 futures lost 15.25 points.

S&P futures found support at the 200-day moving average, just under 1,113, piercing that level before bouncing back.

If the S&P 500, after the open, finds support at its 200-day moving average, that would be a decline of roughly 0.9 percent. A drop of 1 percent leads to 1,100 or 1,088 as the next support levels.

U.S.-listed shares of BP Plc added 1.7 percent to $41.25 in premarket trading. BP finished pumping cement into its ruptured oil well in the Gulf of Mexico on Thursday to seal off the source of the world's worst offshore spill, paving the way to permanently plug the blow-out later this month.

Shares of U.S. grain companies and others in the agriculture sector could be in focus after Russia halted grain exports as the country grapples with its most severe drought on record. Grain company Archer Daniels Midland Co was up 0.8 percent at $30.50.

Kraft Foods Inc reported higher-than-expected quarterly profit and raised its target for cost savings from the acquisition of Cadbury. Its shares rose 1.6 percent to $30.12.

American International Group Inc's shares rose 2.8 percent to $41 after the company reported quarterly results and said it had started talks to exit from government help. AIG is nearly 80 percent-owned by the U.S. government.

Activision Blizzard Inc shed 7.2 percent to $10.90 after it forecast its current-quarter profit and revenue to come in below Wall Street's targets.

(Additional reporting by Ryan Vlastelica and Rodrigo Campos; Editing by Padraic Cassidy)