U.S. MARKET AVERAGES

U.S. stock futures point to an opening above the flat line after yesterday’s trading session of heavy losses when the three major averages tumbled on inflation worries, speculations over interest-rate increases and energy costs.
The market is eagerly awaiting September nonfarm payroll data release, expected to show the real impact of Hurricane Katrina on the U.S. labor market. According to forecasts, 143,000 jobs were lost in September, marking revised expectations of earlier 129,000.

Oil prices started climbing after a five-day decline, suggesting that traders shrugged off signs of faltering U.S. consumption and expect higher demand on the approaching winter season. Light sweet crude for November delivery added 58 cents to $61.94 a barrel. Heating oil, gasoline, and natural gas also advanced.

S&P 500 futures were up 2 points, above their fair value. Dow Jones industrial average futures were up 24 points, while Nasdaq 100 futures were up 1.5 points.

ECONOMIC NEWS

The U.S. economy lost jobs for the first time in more than two years in the month of September, according to a report from the Labor Dept., with the decrease largely due to the impact of Hurricane Katrina.

The report showed that non-farm payroll employment fell by 35,000 jobs in September following an upwardly revised increase of 211,000 in August. Economists had been expecting a more significant decline of about 150,000.

The Labor Dept. noted that the job losses caused by Hurricane Katrina may have been offset in some industries by developments in the rest of the country.

However, the report also showed that the unemployment rate rose to 5.1 percent in September from 4.9 percent in August. Economists had expected the unemployment rate to edge up to 5.0 percent.

While the smaller than expected drop in jobs may offset some of the fears about the impact of Hurricane Katrina, it may add to concerns about higher interest rates. If the economy is able to digest the storms with relative ease, the Fed will likely not hesitate to continue raising rates to battle inflation.

INTERNATIONAL MARKET NEWS

Asian-Pacific benchmarks closed broadly lower on weak U.S. equity markets, speculations of interest-rate hikes and expectations of U.S. September nonfarm payroll data. The Nikkei was the leading decliner, falling down by 1% on high tech issues sell-off, followed by South Korea’s Kospi, down 0.1% on exporter-related stocks. Hong Kong’s Hang Seng ended up 0.1%. The dollar bought 113.34 yen.

European markets traded lower at mid-day after two straight sessions of heavy losses, partly offset by gains in oil, retail and household stocks. Weak U.S. markets, speculations on interest-rate increases, and expectations of nonfarm payroll data release weighed on the market sentiment. The German DAX 30 shed 0.5%, the French CAC 40 lost 0.3%, and London’s FTSE 100 fell 0.1%.

ENERGY, METALS, CURRENCIES

Oil prices started rising after a five-day decline on supply concerns during the winter season. Light sweet crude for November delivery rose 58 cents to trade at $61.94 a barrel on the Nymex. Heating oil added 2 cents to $1.9729 a gallon. Gasoline futures edged up 1 cent to $1.8575 a gallon. Natural gas traded flat at $13.375 per 1,000 cubic feet. London Brent gained 51 cents to $58.88.

Gold prices further climbed in European trading. In London the precious metal traded at $472 per troy ounce, up from $471.40. In Hong Kong gold rose $6.40 to close at $472.55. Silver traded at $7.55, up from $7.51.

In European trading the U.S. dollar traded up against the euro and the pound, but down against the yen. The euro was quoted at $1.2147, down from $1.2154.The dollar changed hands at 113.28 yen, down from 113.36. The British pound was trading at $1.7700, down from $1.7719.

EARNINGS NEWS

GenCorp Inc. (OXM: chart), automotive, aerospace fine chemicals and real estate company, posted a Q3 net loss of 53 cents a share, down from the loss of $1.05 a share in the year-ago period. The company's Q3 loss from continuing operations went down to 8 cents a share vs. 33 cents last year. Sales from continuing operations soared to $134 million, up vs. $116 million in Q3 year-ago.

GenCorp Inc. (GY: chart), automotive, aerospace fine chemicals and real estate company, posted a Q3 net loss of 53 cents a share, down from the loss of $1.05 a share in the year-ago period. The company's Q3 loss from continuing operations went down to 8 cents a share vs. 33 cents last year. Sales from continuing operations soared to $134 million, up vs. $116 million in Q3 year-ago.