Futures mixed ahead of jobs, retail sales reports

[August 06, 2009]  NEW YORK (AP) -- U.S. stock futures are narrowly mixed Thursday as investors refrain from making big bets ahead of reports on retail sales and the labor market.

The market is finding some support from big gains in overseas markets that were driven by solid corporate earnings. But investors are anxious ahead of sales reports from the nation's retailers and the government's weekly tally of job losses -- reports that will give them more insight into the financial health of the American consumer.

Retailers are expected to show that consumers continued to cut back on their spending in July. Overall, sales are expected to be down 5.5 percent, worse than the 5. 1 percent decline in June, according to tally by The International Council of Shopping Centers-Goldman Sachs.

Meanwhile, the Labor Department is expected to report that the number of newly laid-off workers seeking unemployment benefits fell slightly last week, after rising more than expected in the previous week.

In the past two days, stocks have stalled from their big surge in July as investors become more cautious ahead of the government's crucial July employment report on Friday. The market soared higher last month on signs of improvement in industries such as housing and manufacturing, but investors are worried that rising unemployment and still-sagging consumer spending could seriously dampen the economy's recovery.

At the same time, analysts say some pause in buying is warranted after such a huge advance. The Dow Jones industrial average is up 13.9 percent in just 18 days.

Ahead of the market's open, Dow Jones industrial average futures were up 7, or 0.1 percent, at 9,252. Standard & Poor's 500 index futures were down less than a point at 1,000.10, while Nasdaq 100 index futures were down 5, or 0.3 percent, at 1,609.50.

Overseas, Japan's Nikkei stock average rose 1.3 percent and Hong Kong's Hang Seng index jumped 2.0 percent. In late morning trading, Britain's FTSE 100 was up 0.6 percent, Germany's DAX index was up 0.4 percent, and France's CAC-40 was up 0.7 percent.

In earnings related news, Cisco Systems Inc. offered some fairly upbeat news, despite reporting a 46 percent drop in profit in its latest quarter. The technology giant, which narrowly beat expectations, said the quarter may have been the bottom of the recession-related downturn, noting positive trends in orders for its products.

The company's shares slipped 3 percent in premarket trading.

A modest decline in stocks on Wednesday followed minimal gains on Tuesday. Those moves came after a surge on Monday that hurled the S&P 500 index above the 1,000 mark for the first time since November.

Despite the growing caution in the market, analysts have been ecouraged by the orderliness of the pause, noting that stocks have shown strength in their ability to hold on to most of their gains rather than selling off sharply. Analysts also say that the market's dips often present investors who may have missed out on the rally with good buying opportunities.

Bond prices were mostly higher in early trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.72 percent from 3.75 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 32 cents to $71.65 a barrel in electronic trading on the New York Mercantile Exchange.

[Associated Press; By SARA LEPRO]

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