US stocks fall after Fed announces $100 billion term auction facility
NEW YORK -- U.S. stock futures fell Friday after the Federal Reserve said it will take new steps to ease credit troubles, including boosting the amount of money it will auction to banks. The move stirred concern about an employment report due Friday morning.
The Fed said in a statement shortly before release of a widely anticipated employment report that it will boost its Term Auction Facility to $100 billion.
Stock futures, which had been lower, reversed course prior to the Fed's announcement. The Fed received the Labor Department's report in advance; it is set for release to investors at 8:30 a.m. EST.
While the news appeared welcome at first, investors also grew uneasy over whether the Fed's move was ahead of a weaker-than-expected employment report.
Wall Street is eager for a read on the jobs picture. Unemployment remains relatively low by historical standards but an increase could set off fears of a consumer slowdown. The well-being of the consumer, whose spending accounts for more than two-thirds of economic activity, is key to investors' hopes of avoiding more economic pain amid the ongoing pullback in home values and credit troubles.
Wall Street expects the report will show the country's unemployment rate ticked up to 5 percent in February from January's 4.9 percent, according to Thomson/IFR. Payrolls are seen as rising by 25,000 compared with a loss of 17,000 in January.
A sour reading could weigh heavily on investors. Concerns about home foreclosures and further credit woes -- a string of troubles that started when debt backed by home mortgages began to go bad -- rippled through Wall Street on Thursday. The Dow Jones industrial average lost nearly 215 points, while the broader Standard & Poor's 500 index fell 2.20 percent.
Early Friday, Dow futures fell 38, or 0.01 percent, to 12,032. S&P 500 futures fell 4.40, or 0.34 percent, to 1,304.90. The Nasdaq 100 index fell 6, or 0.35 percent, to 1,713.00.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.54 percent from 3.59 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 8 cents to $105.55 per barrel in premarket electronic trading on New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average closed down 3.27 percent after Wall Street's decline. In afternoon trading, Britain's FTSE 100 fell 0.93 percent, Germany's DAX index lost 0.89 percent, and France's CAC-40 slid 1.12 percent.