US STOCKS-Futures drop before jobs data; Merrill dives
Reuters* Caution before August payrolls report
* Global stocks markets slide on growth worries
* Merrill Lynch falls after being cut by Goldman
* UST rises on report it is a Altria takeover target
By Ellis Mnyandu
NEW YORK (Reuters) - U.S. stock futures fellFriday as mounting concerns about a global economic slowdowndiminished investors' appetite for risk and investors bracedfor the government's report on August non-farm payrolls.
Stock markets fell across Asia overnight, and Europe alsotraded in the red Friday, boosting the allure of safe-heavengovernment debt. Benchmark 10-year U.S. Treasury yields fell totheir lowest in 4-1/2 months.
After Thursday's sharp slide on Wall Street, investorsfeared that the jobs data might provide further signs of labormarket deterioration as fallout from the housing slump hobblesthe economy and darkens the profit outlook.
The payrolls report is due out at 8:30 a.m. (1230 GMT).
Merrill Lynchis poised to be among thehigh-profile drags after Goldman Sachs cut the investment bankto a "sell" and said it will likely incur additionalwrite-downs for soured mortgage investments.
Merrill shares slid 6.5 percent to $24.48 before the bell.
"The economic backdrop remains reasonably negative," saidRick Meckler, president of investment firm LibertyView CapitalManagement in New York.
"We keep coming back to those stress points of the systemwhere people are expecting the U.S. Federal Reserve to dosomething. It almost seems the market is looking for some sortof act to instill confidence."
S&P 500 futures fell 3.3 points and were below fairvalue, a formula that evaluates pricing by taking into accountinterest rates, dividends and time to expiration on thecontract. Dow Jones industrial average futures fell 28points and Nasdaq 100 futures lost 0.75 point.
On the bright side, shares of UST Incjumped 18.6percent to $64.06 before the bell after the New York Timesreported that Altria Group Incis in advanced talks tobuy the maker of Skoal and Copenhagen smokeless tobacco for $10billion. The newspaper cited people close to the negotiations.
A median forecast by 87 economists in a Reuters pollanticipates the Labor Department will report employers cut75,000 jobs outside the farm sector in August after dropping51,000 in July.
U.S. stocks suffered their steepest decline in more thantwo months on Thursday, as more signs of weakness in the labormarket and increasingly sluggish growth overseas fueled fearsabout the ability of the U.S. economy to stage a recovery. (Editing by Kenneth Barry)