Stocks set to rebound from big sell-off - msnbc.com Stocks set to rebound from big sell-off - msnbc.com

Thursday, May 31, 2012

Stocks set to rebound from big sell-off - msnbc.com

Stocks set to rebound from big sell-off - msnbc.com

Stocks are set to rebound from their worst drop in two weeks Thursday as investors eye data which could help equities decouple from euro zone headlines.

U.S. private employers created 133,000 jobs in May, fewer than expected, a report by a payrolls processor showed.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 148,000 jobs. April's figure was revised down slightly to an increase of 113,000 from the previously reported 119,000.

The data come ahead of Friday's key payrolls report for May. Later, initial claims are expected to show 370,000 new filings, unchanged from last week.

The preliminary estimate for first-quarter gross domestic product will also be eyed. Economists forecast a 1.9 percent annualized pace of growth, compared with a 2.2 percent rate in the advance Q1 estimate.

The S&P 500 fell 1.4 percent on Wednesday, its biggest decline since May 17, as anxiety over the euro zone's fiscal crisis sent investors away from riskier assets and into safe havens such as Treasury bonds.

The CBOE volatility index, a gauge of market anxiety, jumped 14.8 percent, its largest daily gain in almost three months.

European shares steadied, recovering some poise after the previous session's steep losses but were still set for their worst monthly loss since August as concern over Spain's financial problems continued to weigh.

The benchmark S&P index is on pace for its worst monthly decline since September on increasing concern over the euro zone's debt crisis and a spate of tepid domestic economic data.

Equities have been closely linked to the fortunes of the euro, with the 50-day correlation between the currency and the S&P 500 at 0.92. Expectations of an Irish vote in favor of Europe's fiscal pact helped the euro recover from a near two-year low against the dollar.

Retailers will be in focus as they report monthly same-store sales results. Costco Wholesale Corp reported a four percent rise in comparable sales in May, falling short of analysts' forecasts as a strong dollar hurt the value of its sales overseas.

TiVo Inc reported a bigger-than-expected quarterly loss and forecast another loss for the current quarter as the maker of digital television recorders fights costly legal battles to protect its patents.

Asian shares slid amid concern Spain may fail to rescue its banks due to soaring borrowing costs, compelling it to seek a bailout.

Reuters contributed to this report.


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