US pre-open: Stocks seen lower as investors eye payrolls

US futures pointed to a weaker open on Wall Street as investors eyed the release of the nonfarm payrolls report.

At 1055 GMT, Dow Jones Industrial Average futures were down 0.2%, S&P 500 futures were 0.3% weaker and Nasdaq futures were 0.6% lower.

In Europe, the main indices were all in the red as investors grew jittery ahead of Sunday’s Italian referendum on constitutional reform.

Italians will be asked to decide whether to accept a package of constitutional reforms put forward by centre-left Prime Minister Matteo Renzi, who has said he would resign if the proposals are rejected.

Market participants are concerned that if the outcome is a 'no' vote, political uncertainty will ensue, making the task of sorting out non-performing loan issues at the country’s banks more difficult.

Meanwhile, oil prices pulled back following the OPEC-fuelled rally. West Texas Intermediate was down 1.1% to $50.49 a barrel and Brent crude was down 1.2% to $53.28.

Remo Fritschi, institutional sales manager at ADS Securities London, said: “After yesterday’s mixed session, futures are currently indicating that we’ll have a softer start to Friday’s trade on Wall Street, although we do obviously have the nonfarm payrolls to be released before the opening bell.

“Although expectations are that these numbers will impress and reinforce the fact we’ll see a rate hike from the Federal Reserve before the year is out, the risk would seem to be that if metrics such as average wages are starting to take off then a more hawkish stance may be necessary in 2017. Anything that looks like an overly aggressive monetary policy could well serve to heighten fears that the rally for stocks is now truly overdone, with downside pressures coming to the fore as a result.”

The nonfarm payrolls report and unemployment rate are due at 1330 GMT, with payrolls expected to have risen by 200,000 and the unemployment rate forecast to remain at 4.9%.

In corporate news, Ulta Salon Cosmetics & Fragrance rose sharply in pre-market trade after it lifted its outlook for the year late on Thursday.

Discount retailer Big Lots was scheduled to report earnings ahead of the open.