Stock futures retreat, point to lower opening

[May 20, 2010]  NEW YORK (AP) -- Stock futures fell Thursday as investors keep an eye on the European debt crisis and get a key domestic report on weekly jobless claims.

The Labor Department's unemployment report is expected to show new claims for jobless benefits dipped modestly, indicating a recovery in the jobs market is slow.

But if recent trends hold, investors will focus more on the health of Europe's economy than the ongoing domestic recovery. The euro fell again, and continues to hover near four-year lows. The currency, used by 16 countries in Europe, has become a key indicator of confidence in the continent's ability to contain growing debt problems in countries like Greece, Portugal and Spain. The euro fell to $1.2333, a day after touching a four-year low of $1.2146 on Wednesday.

Movements in the euro have largely dictated the movements of stock markets globally in recent weeks. Major European indexes gave up their morning gains Thursday as the euro retreated.

Greek workers are again in the streets protesting recently approved budget cuts that were necessary for the country to receive a bailout. Greece was able to repay debt that came due Wednesday only because it had access to a rescue package from the European Union and International Monetary Fund.

Ahead of the opening bell, Dow Jones industrial average futures fell 49, or 0.5 percent, to 10,356. Standard & Poor's 500 index futures fell 6.20, or 0.6 percent, to 1,103.70, while Nasdaq 100 index futures dropped 16.00, or 0.9 percent, to 1,852.25.

In the U.S, economic signs continue to point to a slow, steady recovery.

Economists polled by Thomson Reuters predict weekly jobless claims fell to 440,000 last week from 444,000 a week earlier. It would mark the fifth straight weekly decline, but the total number of claims would still be above the level that economists believe is necessary to steadily create jobs.

Weekly claims have been stuck around 450,000 since January, unable to break closer to the 425,000 range that is considered a key indicator that employers are regularly hiring new workers.

High unemployment remains one of the biggest obstacles to a sustained domestic recovery. Analysts say that the economy will only improve modestly until the unemployment rate drops sharply from its current level of 9.9 percent.

Stocks are trying to steady after falling again Wednesday. Ongoing concerns about Europe's economy and a disappointing report on the domestic housing market sent stocks lower. A trade group said the number of people behind on repaying mortgages hit a record high in the first quarter, signaling foreclosures might climb again in the coming months. The housing market has been slow to recover from the recession.

The Dow dropped for the ninth time in the past 12 trading sessions. However, it pared most of its loss late in the day. It closed down 67 points after falling as much as 186.

Meanwhile, bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.36 percent from 3.37 percent late Wednesday.

Overseas, Britain's FTSE 100 rose less than 0.1, Germany's DAX index fell 0.5 percent, and France's CAC-40 dropped 0.7 percent.

[Associated Press; By STEPHEN BERNARD]

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