NEW YORK – Stock futures pointed to a higher open Friday as Wall Street got the positive news it had been hoping for: job losses slowed in April.
Investors hopeful for an economic recovery are cheering the Labor Department’s report, which showed employers cut 539,000 jobs last month, the fewest in six months and much less than the 620,000 job losses analysts had been expecting.
However, the unemployment rate climbed to 8.9 percent from 8.5 percent in March as many businesses refrained from hiring amid an uncertain economic outlook.
Futures were already rising ahead of the labor report in reaction to the results of the government’s stress tests of banks that said 10 of the 19 largest U.S. banks will need to raise about $75 billion in new capital as a buffer against losses if the economy worsens. Some investors feared the test results would show the big banks needed much more capital.
Ahead of the market’s open, Dow Jones industrial average futures rose 104, or 1.2 percent, to 8,491. Standard & Poor’s 500 index futures rose 12.10, or 1.3 percent, to 919.10, while Nasdaq 100 index futures rose 12.25, or 0.9 percent, to 1,406.75.
The market has been on an upward swing since early March, rising more than 25 percent from 12-year lows on good news about business at banks and an increasing amount of improving economic data on housing, manufacturing and other key sectors of the economy.
Even the battered labor market has been showing signs of moderation. On Thursday, the government said new applications for unemployment benefits fell unexpectedly last week to the lowest level in 14 weeks. That reading followed a better-than-expected private snapshot of the labor market on Wednesday.
On Thursday, the Dow ended down 102 points, erasing the previous day’s gains as investors locked in profits ahead of the stress test results. With Thursday’s loss, the index is down 4.2 percent for the year. Broader indexes also declined.
Financial stocks, which have largely led the market’s spring rally, were mostly higher in pre-market trading.
Citigroup Inc. gained 26 cents, or 6.8 percent, to $4.07, while shares of Bank of America Corp. jumped $1.30, or 9.6 percent, to $14.81. The stress tests found that the Charlotte, N.C.-based bank needs by far the most capital of any of its peers — $33.9 billion. The bank plans to raise about $17 billion in capital in the coming weeks, and plans an additional $10 billion in asset sales.
Wells Fargo & Co. needs $13.7 billion, GMAC LLC $11.5 billion, Citigroup Inc. $5.5 billion and Morgan Stanley $1.8 billion. Both Wells Fargo and Morgan Stanley also have announced plans to raise capital through public stock offerings. Citigroup said it plans to convert $5.5 billion of preferred shares into common stock to raise the extra funds.
The other firms found to need a bigger capital cushion are Regions Financial Corp., SunTrust Banks Inc., KeyCorp, Fifth Third Bancorp, and PNC Financial Services Group Inc.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 3.33 percent from 3.27 percent late Thursday.
The dollar fell against other major currencies, while gold prices rose.
Light, sweet crude rose $1.50 to $58.21 in electronic trading on the New York Mercantile Exchange.
Overseas, Japan’s Nikkei stock average rose 0.5 percent. In afternoon trading, Britain’s FTSE 100 gained 1.7 percent, Germany’s DAX index was up 2.8 percent, and France’s CAC-40 added 2.7 percent.