Futures head south on jobs report

NEW YORK (CNNMoney.com) -- Stock futures fell early Friday as a weak monthly job report and mounting credit worries took a toll on sentiment and investors.

About one hour before the start of trading, Nasdaq and S&P futures were sent lower after the Labor Department's February jobs report said U.S. payrolls fell 63,000 after a 22,000 net job loss reported in January.

Economists surveyed by Briefing.com were forecasting a narrow 25,000 gain. The February reading was only the second decline in employment in four years, and marked the largest decline since March of 2003.

"The markets are focusing on the fact that the economy is not producing jobs," said Avalon Partners chief market economist Peter Cardillo, who said that investors view the weak report as another sign of a looming economic recession.

"This brings us a step closer to one quarter of negative GDP growth," he added.

Other readings leading up to this report have suggested even greater weakness in the labor market. Payroll services firm ADP on Wednesday reported that there was loss of 23,000 jobs by private sector employers in the month, the first negative number in the closely watched reading.

The Conference Board's consumer confidence survey also slowed Americans taking a much more negative view of the availability of jobs in February.

The latest consumer confidence reading released early Friday from RBC showed its CASH index, which measures consumer attitudes and spending by households, fell to the lowest level in its six-year history. The index plunged to 33.1 for March from 48.5 in February, which been the previous record low. The index, which surveys more than 1,000 Americans had been at 56.3 as recently as January.

Credit worries sank stocks on Thursday and remained a concern after Carlyle Capital, a Dutch-listed unit of U.S. private-equity firm Carlyle Group, said Friday that lenders have started liquidating some of its mortgage securities.

In another sign of problems in credit markets, Citigroup (C, Fortune 500) announced after the bell Thursday that it would trim its portfolio of mortgage-backed by $45 billion over the next 12 months, which would be a 20% decrease from December 2007 levels.

Dutch-Belgian bank and insurer Fortis became the latest firm in the sector to be hit by the subprime woes. It took a $2.3 billion after-tax writedown on those holdings.

Concerns about the U.S. economy sent the dollar plunging to a three-year low against the Japanese yen and another all-time low against the euro in early trading.

Those credit market concerns, worries about the U.S. economy and the weakening dollar, which could cut demand for imports by American consumers, combined to send overseas markets sharply lower. Asian stocks tumbled, with Japan's Nikkei finishing the session 3% lower. European shares tumbled in morning trading.

In other corporate news, General Motors (GM, Fortune 500) announced Chairman and CEO Rick Wagoner will earn a salary of $2.2 million in 2008, restoring his base pay to the level it was before he took a pay cut in 2006 as part of the company's turnaround plan. Earlier this week Wagoner revealed he was giving up day-to-day responsibilities to newly named President Fritz Henderson. Henderson, who had been chief financial officer, will get a base salary of $1.8 million.

Financier Carl Icahn will be the focus of a report on the CBS show "60 Minutes" Sunday. The network said late Thursday that Icahn told the network that he made $300 million on his investment in Time Warner (TWX, Fortune 500), even though his 2006 effort to have the media conglomerate split into pieces failed. He also said he made another $300 million on his stake in BEA Systems (BEAS), which he pushed to sell out to rival business software provider Oracle (ORCL, Fortune 500). CNNMoney.com is a unit of Time Warner.

Oil prices were little changed in early electronic trading, but gold climbed $4.80 to $981.90 an ounce.