Stocks point to lower open ahead of economic data

[February 12, 2009]  NEW YORK (AP) -- Wall Street is still juggling concerns about the U.S. economy even as Congress has struck a deal on a $789 billion economic stimulus plan.

Stock futures pointed to a lower open on Thursday ahead of government reports on retail sales, unemployment and business inventories.

Investors are hoping the stimulus plan's mix of spending and tax cuts will be able to help revive an economy mired in its worst recession in generations. But the plan, if passed, will do little to help immediate economic readings.

Investors will now be examining a compromise version of the stimulus plan for insights into how quickly it could begin to work its way into the economy. The House could vote on the measure as soon as Thursday, though Friday seemed more likely. The Senate would follow, but its schedule is less certain.

Regardless, the day's economic readings and those for some time to come were expected to be weak.

Wall Street expects the Commerce Department to report that U.S. retail sales fell for a seventh straight month in January as job losses and a deep recession cut into consumers' willingness to spend.

Economists polled by Thomson Reuters expect retail sales to show a drop of 0.8 percent after a 2.7 percent plunge in December.

A Labor Department report is expected to show that new claims for unemployment benefits slipped last week while continuing claims remain at record levels.

Wall Street expects initial jobless benefit claims to fall to a seasonally adjusted level of 610,000 from the previous week's 626,000. Economists also expect the number of people claiming benefits for more than one week will increase to 4.8 million from 4.79 million.

The retail and jobs reports are due at 8:30 a.m. EST.

Then, at 10 a.m., another Commerce Department report is expected to show that businesses trimmed their inventories for a fourth straight month in December.

Economists expect inventories dropped 0.9 percent after the 0.7 percent drop in November that was the largest in seven years.

Investors turned cautious ahead of the report and after a moderate gain in stocks Wednesday. The advance did little to offset the market's slide of more than 4 percent Tuesday on worries about the government's latest plans to overhaul the second half of its $700 billion financial rescue fund.

Ahead of the economic reports, Dow Jones industrial average futures fell 57, or 0.72 percent, to 7,839. Standard & Poor's 500 index futures fell 7.60, or 0.91 percent, to 823.90, while Nasdaq 100 index futures fell 10.50, or 0.86 percent, to 1,214.00.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.75 percent from 2.76 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.32 percent from 0.29 percent.

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

Light, sweet crude fell 41 cents to $35.53 a barrel in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average fell 3.03 percent. In afternoon trading, Britain's FTSE 100 fell 1.48 percent, Germany's DAX index fell 2.27 percent, and France's CAC-40 fell 1.81 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com/

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[Associated Press; By TIM PARADIS]

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