Stock Futures Hold Sharp Losses After U.S. Adds 200,000 Jobs, Worker Pay Rises

U.S. equity futures held sharp losses on Friday, Feb. 2, after the U.S. added 200,000 jobs to payrolls in January, above forecasts, and yearly wage gains rose at the fastest pace since 2009.

Economists were forecasting jobs gains of 175,000 last month. The unemployment rate of 4.1% in January held steady from December. But yearly wages rose 2.9% from 2.6% after average hourly wages rose 9 cents, or 0.3%, to $26.74. .

Contracts tied to the Dow Jones Industrial Average fell 217 points, while futures for the broader S&P 500 fell 19.75 points.

In Europe, the Stoxx 600 index, the broadest measure of share prices, fell 1.01%.

A notable spike in benchmark U.S. Treasury yields, which took 10-year notes to near a four-year high of 2.8%, also had investors on edge amid signals of faster inflation in the world's largest economies and the impact it will have on growth and interest rates. 

The Federal Reserve has signaled at least three rate hikes this year, and the European Central Bank is widely expected to at least ease the pace of its €2.55 trillion quantitative easing program later this year amid the strongest economic performance for the region in a decade. 

The dollar, however, has yet to respond to the so-called "reflation trade," with the greenback holding at near three-year lows of 88.82 against a basket of global currencies overnight as investors remained concerned about the partisan battles among U.S. lawmakers and the potential for another government shutdown next week as they squabble over budget allocations and immigration rules.

Sentiment also held down by a mixed set of first-quarter earnings from Apple Inc. (AAPL) , which unveiled record revenue for the three months ended in December of $88.3 billion and profitsof $3.89 a share, but disappointed investors by selling fewer than expected iPhones over the period (77.3 million) and forecasting less-than-anticipated sales for its current fiscal quarter.

However, Apple also told investors that it would work toward reducing its $285 billion cash balance, with the aim of returning it to shareholders, a move that helped boost the stock by more than 2.4% earlier in premarket trading. The stock, however, turned lower and was most recently down 0.45%.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.Want to be alerted before Cramer buys or sells the stock? Learn more now.

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