Stock futures dip ahead of open

[November 05, 2009]  NEW YORK (AP) -- U.S. stock futures are slightly lower Thursday ahead of more data on consumer spending and jobs, two of the market's biggest concerns.

Overseas, worries about the strength of the economy's recovery weighed on markets. European shares sold off ahead of interest rate decisions from the European Central Bank and the Bank of England. Both banks are expected to keep borrowing costs low for some time.

The Federal Reserve on Wednesday said it would keep its own interest rates low for "an extended period." The statement accompanying the central bank's rate decision noted that housing activity has picked up in recent months and that consumer spending appears to be growing, albeit slowly.

October sales reports from major retailers on Thursday are expected to show some recovery in spending. Early reports from Big Lots Inc. and Costco Wholesale Corp. were fairly solid.

Later Thursday morning, the Labor Department will issue its weekly report on the number of workers filing for unemployment benefits for the first time. That report will come a day ahead of the department's key report on monthly job losses. Investors are worried that so long as job losses remain high, consumer spending will remain sluggish and lead to slower economic growth.

Ahead of the market's open, Dow Jones industrial average futures fell 10, or 0.1 percent, to 9,775. Standard & Poor's 500 index futures fell 1.50, or 0.1 percent, to 1,045.50, while Nasdaq 100 index futures fell 3, or 0.2 percent, to 1,683.75.

In late morning trading, Britain's FTSE 100 fell 0.5 percent, Germany's DAX index lost 0.3 percent, and France's CAC-40 fell 0.3 percent. Earlier Thursday, Japan's Nikkei stock average fell 1.3 percent, while Hong Kong's Hang Seng index slipped 0.6 percent.

On Wednesday, investors initially cheered the Fed's assessment of the economy, which followed earlier reports on service industries and employment that seemed to ease some of investors ongoing concerns. But stocks failed to hold on to their big gains. The Dow ended up about 30 points, after rising as much as 156 points after the Fed announcement.

Trading followed a pattern that has become all too familiar on Wall Street in recent weeks. While the market is able to move higher on good news, it has become more difficult for the gains to stick. Swings between positive and negative territory have become the norm.

Analysts say the market is very uncertain whether the pace of the economic recovery can continue at the same clip as in the third quarter, when gross domestic product grew 3.5 percent. The fear is that government stimulus programs have become a crutch for the economy and that such growth won't be sustainable once those stimulus measures are removed.

In other trading, bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.50 percent from 3.53 percent late Wednesday.

The dollar was slightly higher against other major currencies. Gold prices rose added $2 to $1,089 an ounce.

Light, sweet crude fell 46 cents to $79.94 a barrel in electronic premarket trading on the New York Mercantile Exchange.

[Associated Press; By SARA LEPRO]

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