Stocks point lower ahead of unemployment report

[May 21, 2009]  NEW YORK (AP) -- Wall Street signaled stocks would open lower Thursday ahead of a weekly reading on unemployment claims.

Economists expect government data will show that initial claims for jobless benefits fell slightly but remain elevated because of layoffs in the auto industry.

The Labor Department's tally of new jobless claims is expected to drop to a seasonally adjusted 630,000 from the previous week's 637,000, according to a survey of Wall Street economists by Thomson Reuters.

Continuing claims are forecast to rise to 6.65 million from 6.56 million. That would be the highest total in records dating to 1967 and a 16th straight record.

The report is due at 8:30 a.m. EDT.

Investors also grew nervous following a warning from credit ratings agency Standard & Poor's that Britain may have its rating cut because of rising debt levels. The ratings agency reaffirmed the country's actual ratings but it lowered its outlook to "negative" from "stable" because of enormous borrowing aimed at battling the recession and banking crisis.

Other economic reports are expected. The Conference Board's index of leading economic indicators, which is designed to forecast economic activity in the next three to six months, is likely to rise have risen in April after not increasing for nine straight months.

The report is scheduled for release at 10 a.m.

Also at 10 a.m., the Philadelphia Federal Reserve is also expected to release a report on regional manufacturing.

Ahead of the reports, Dow Jones industrial average futures fell 43, or 0.5 percent, to 8,362. Standard & Poor's 500 index futures fell 5.00, or 0.6 percent, to 894.90, while Nasdaq 100 index futures fell 5.25, or 0.4 percent, to 1,387.25.

Bond prices mostly fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.20 percent from 3.19 percent late Wednesday.

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

Light, sweet crude fell $1.22 to $60.82 a barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average rose 0.2 percent. In afternoon trading, Britain's FTSE 100 fell 2.2 percent, Germany's DAX index fell 1.7 percent, and France's CAC-40 fell 1.4 percent.

[Associated Press; By TIM PARADIS]

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