[R]9:45AM Market opened mixed on weaker-than-expected employment report.[/R]
U.S. stock markets opened mixed on Friday. Weaker-than-expected January employment report eased inflation concerns, but dragged economically-sensitive stocks on the Dow. The Labor Department report signaled employers were more cautious than anticipated in adding jobs in the new year. Shares in aluminum producer Alcoa (AA: chart) slipped 2.2%. General Motors (GM: chart) also weighed, falling 2.2% due to a big drop in January sales. In addition, Amazon (AMZN: chart) shares dropped 3.8% on concerns about thinning margins.

Among other companies in focus, Intuitive Surgical (ISRG: chart) surged 16.1% after reporting profit drop that came in above estimates. Video game publisher Electronic Arts (ERTS: chart) rose 6.3% on Q4 earnings that were well above analyst expectations. In midmorning trading Friday, the Dow Jones industrial average was down 0.32, or less than 0.01%, at 12,673.36. The Standard & Poor's 500 index was up 2.25, or 0.16%, at 1,448.19 and the Nasdaq composite index was up 7.14, or 0.29% at 2,475.52. Bonds rose on the jobs report, with the yield on the benchmark 10-year Treasury note falling to 4.82% from 4.83% late Thursday.


[R]9:30AM NY-2:30PM London FTSE gains on Friday on likely bid for Sainsbury.[/R]
The UK market was higher on Friday. The FTSE 100 gained 42.4 points, 0.7%, to 6,324.6 in mid-day session.

Advancers

American KKR and Blackstone and London-based CVC said they were assessing a potential bid for J Sainsbury but were at the preliminary stage. Sainsbury jumped 18.3%, boosting other retailers. William Morrison gained 6.5% as Tesco firmed 3.2%, Kingfisher added 3.8% and Marks & Spencer put on 3.3%.

Housebuilders traded higher with Redrow advancing 1.7 per cent, Persimmon higher by 1.1% and Barratt Developments 0.8%.

Imperial Tobacco shares also advanced as JP Morgan took on board the chances of a bid for the group and repeated its overweight rating on the stock. The tobacco company traded 5.6%.

British Airways shares moved higher by 1.8% on mixed third-quarter results. The airline reported a 27% drop in operating profits but its revenue advanced 0.5% from a year ago.

Decliners

Royal Dutch Shell declined 1.1% after Goldman Sachs reduced its rating on the stock from buy to neutral.

Accountancy software group Sage shed 1% after Merrill Lynch downgraded the stock from buy to neutral on valuation grounds as the shares have climbed above its price target.

Vehicle salvage specialist Universal Salvage has received a bid offer worth, valuing the company at 57 million pounds. However, the stocks declined 1.32%.

Legacy software group Micro Focus says that revenue growth for this year should meet or marginally exceed the top end of its previously estimated range of 7% to 10%. Micro Focus dipped 0.2%.


[R]9:00AM Market futures pointed higher, helped by upbeat employment report.[/R]
U.S. stock futures moved higher after a solid payrolls report indicated strength in the economy. The Labor Department reported that U.S. nonfarm payrolls increased by 111,000 in January, while the unemployment rate climbed to a four-month high of 4.6%. The new jobs added last month fell short of analyst expectations for a gain of 150,000. The report suggested that the jobs market started at a slower pace in 2007 and still remains in good shape.

Microsoft (MSFT: chart) also helped boost the sentiment, rising 1% in the pre-open after it was upgraded to buy from neutral at Banc of America Securities. Among other pre-market highlights, Amazon (AMZN: chart) shares dropped 2.8% on the margin worries. The retailer posted better-than-expected profit and sales and guidance for the year that exceeded analyst expectations. Chevron Corp. (CVX: chart) said its Q4 profit dropped 9% to $3.77 billion, or $1.74 per share, compared with net income of $4.14 billion, or $1.86 per share a year earlier. The earnings beat the average estimate by a penny. Revenue for the period totaled $47.7 billion, down 11% from $53.8 billion in the previous year. The stock inched up 0.01% in pre-opening trade.

Electronic Arts Inc. (ERTS: chart) rose 6.5% in premarket trading after the company said Q3 profit exceed expectations, despite a 38% decline in sales. On the downside in the early session, American depositary shares of Swedish company LM Ericsson ((ERIC: chart) fell 6.2% after the world''s largest wireless networking company gave a disappointing outlook. S&P 500 futures rose 3.4 points at 1,454.20 and Nasdaq 100 futures improved 2.75 points at 1,806.00. Dow industrial futures rose 24 points.

[R]Jobs growth in January came in below expectations.[/R]
Friday morning, the Department of Labor released its closely watched report on the employment situation in the month of January, showing that the U.S. economy added fewer jobs than economists had been expecting. The report showed that non-farm payroll employment rose by 111,000 in January following an upwardly revised increase of 206,000 in December. Economists had expected payrolls to increase by 150,000 compared to the increase of 167,000 originally reported for the previous month. The Labor Department said that the job growth was largely due to a continued increase in jobs in service-providing industries, which added 104,000 jobs in January following an increase of 209,000 in December. The growth in service jobs reflected notable increases in jobs in the education and health services, professional and business services, and leisure and hospitality industries.

However, the report also showed a continued decline in manufacturing jobs, which fell by 16,000 in January after falling by 18,000 in December. A decrease of 23,000 jobs in the motor vehicles and parts industry contributed to the drop in manufacturing jobs. Additionally, the Labor Department said that the unemployment rate edged up to 4.6 percent in January from 4.5 percent in the previous month. The increase came as a surprise to economists, who had expected the unemployment rate to remain unchanged. The higher unemployment rate was partly due to an increase in the size of the labor force, although the number of people that were unemployed also rose. The report also showed that employees'' average hourly earnings rose $0.03 or 0.2 percent to $17.09 in January. Economists had been expecting a slightly larger increase in wages of about 0.3 percent. With the increase, wages were up 4 percent compared to January of 2006.