Futures turn positive on jobs report

NEW YORK (CNNMoney.com) -- U.S. stock futures jumped before the market open Friday after a much-anticipated jobs report came in considerably stronger than expected.

The U.S. added 166,000 jobs in October, more than double forecasts, according to a Dow Jones report. The jobless rate held steady at 4.7 percent, it said.

At 8:40 a.m. ET, futures were positive, with the broader S&P erasing earlier declines while tech-heavy Nasdaq futures were slightly higher.

The jobs report comes a day after renewed credit worries sent the Dow Jones industrial average plunging 362 points, or 2.6 percent. The decline marked the Dow's fourth-biggest point decline of the year.

Stocks sold off around the world Friday, taking cues from Wall Street. Asian stocks fell sharply, with Japan's Nikkei index dropping 2 percent. Major markets in Europe were lower in morning trading.

Still, some problems in the financial sector are likely to get attention from the markets once again, no matter what the jobs report shows.

The Wall Street Journal reported Friday that No. 1 U.S. brokerage firm Merrill Lynch (Charts, Fortune 500) engaged in deals with hedge funds that may have been aimed at delaying the recognition of losses on its subprime mortgage investments. The paper reports the Securities and Exchange Commission is likely to look at those arrangements.

News that Merrill had taken a much-larger-than-expected $7.9 billion writedown on such investments shook the company's stock as well as broader markets on Oct. 24 and helped prompt the departure of its CEO this week. Shares of Merrill Lynch fell 1.7 percent in early Frankfurt trading Friday.

Cardillo said worries about looming losses for finance companies are one of the greatest problems for the broader markets at the moment.

"There's a lot of negativity out there, a lot of the fears that the end of the world is coming," he said. "I kind of think it's overdone."

Dow component Exxon Mobil (Charts, Fortune 500), which saw shares plunge in Thursday's sell-off after it posted disappointing earnings, could get a lift Friday after the Alabama Supreme Court on Thursday threw out nearly all of a $3.6 billion verdict in a natural gas royalties case brought by the state government there. Shares gained 0.4 percent in after-hours trading after the decision was announced late Thursday.

Exxon Mobil rival Chevron (Charts, Fortune 500) is due to report results before the open Friday, with analysts forecasting a 10 percent drop in earnings per share.

Oil prices rebounded in early trading Friday, making up much of the slide in prices in Thursday trading. The December contract for a barrel of light sweet crude gained $1.07 to $94.56 in electronic trading.

Media conglomerate Viacom (Charts) is also due to report earnings and analysts are forecasting improved results there.

Viacom's former corporate sibling CBS (Charts, Fortune 500) posted a better-than-expected gain in earnings after the bell Thursday, but its shares slipped slightly in after-hours trading after the negotiating committee of the Writers Guild recommended that writers strike the nation's television networks.

In other media news, radio host Don Imus will return to the airwaves Dec. 3 on a New York station owned by Citadel Broadcasting (Charts). Imus was fired by CBS in April for racist and sexist remarks he made on his show about the Rutgers women's college basketball team. Shares of Citadel gained 2.6 percent in after-hours trading.