US stocks head to lower as oil advances

[September 04, 2008]  NEW YORK (AP) -- Wall Street headed for a lower open Thursday with higher oil prices, the release of August retail sales reports and pending economic data keeping investors on the sidelines.

The price of crude moved to near $110 a barrel as Wall Street waited to see if a weekly U.S. inventory report would contain evidence that slowing economic growth has cut demand. The Energy Department is scheduled to release its report on oil stockpiles for the week ended Aug. 29 later in the session.

A barrel of light sweet crude rose 64 cents to $109.99 a barrel in electronic trading on the New York Mercantile Exchange. It dipped below $108 a barrel on Wednesday.

Meanwhile, many U.S. chain stores will report their August sales, which are expected to be weak except for some discounters. Consumers have been cautious with back-to-school shopping.

Investors are also awaiting government data due out at 8:30 a.m. EDT that is expected to show the number of newly laid off people filing jobless benefit claims remained above 400,000, an indication of a weak labor market. The Labor Department's tally of new claims for unemployment insurance for the week ending Aug. 30 is projected to fall slightly to a seasonally-adjusted level of 420,000 from 425,000 in the prior week, according to a survey of economists by Thomson/IFR.

Another report is expected to show the nation's service sector improved slightly last month.

The Institute for Supply Management, a trade group of purchasing executives, is expected to report at 10 a.m. EDT that its service sector index rose to 50.0 from 49.5 in July, according to Wall Street economists surveyed by Thomson/IFR. Any reading above 50 signals growth, while a reading below 50 indicates contraction.

Dow Jones industrial average futures fell 16, or 0.14 percent, to 11,525. Standard & Poor's 500 index futures shed 4.70, or 0.37 percent, to 1,270.50 and Nasdaq 100 index futures dropped 9.25, or 0.50 percent, to 1,825.00.

The move in futures follows a volatile session on Wednesday, with investors unsettled about the economy ahead of the government's August employment report on Friday and only somewhat relieved about the recent slide in commodities prices. The Dow ended up 15.96, after rising by as many as 37 points and falling by as many as 100.

Bond prices moved higher Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.69 percent from 3.70 percent late Wednesday.

Overseas, the Bank of England and the European Central Bank will be announcing interest rate decisions. Britain's FTSE 100 rose 0.24 percent, Germany's DAX index fell 1.25 percent, and France's CAC-40 shed 0.81 percent. Japan's Nikkei stock closed down 1.04 percent.

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[Associated Press; By JOE BEL BRUNO]

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