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Wall Street to open on the downside after slew of earnings

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[April 17, 2008]  NEW YORK (AP) -- Wall Street headed for a lower opening Thursday with investors growing more cautious about the nation's financial health as they examined a batch of mixed earnings reports.

Merrill Lynch reported a first-quarter loss of $2.14 billion, a shortfall that was wider than the average analysts estimate. The loss arrived after the world's largest brokerage wrote down the value of assets tied to mortgages and leveraged loans by several billion dollars. The company also said it would eliminate a net 4,000 jobs.

Merrill's report followed a larger-than-anticipated rise in IBM Corp.'s quarterly earnings, but there were disappointing results from Nokia Corp., the world's biggest mobile phone company, as well as drug maker Pfizer and student lender Sallie Mae.

The mostly downbeat earnings data appeared to created an uneasy mood on Wall Street ahead of the Labor Department's weekly report on unemployment claims, the Philadelphia Federal Reserve's index of area manufacturing, and several speeches by Fed officials.

Harley Davidson said it was cutting hundreds of jobs and would ship up to 27,000 fewer of its iconic motorcycles this year.

Dow Jones industrial average futures fell 44, or 0.35 percent, to 12,610 before the market opened.

Broader stock index futures also slid. Standard & Poor's 500 index futures fell 6.50, or 0.47 percent, to 1,364.40, and Nasdaq 100 index futures fell 6.00, or 0.32 percent, to 1,856.25.

On Wednesday, stocks had shot higher on the heels of stronger-than-expected earnings from JPMorgan Chase & Co., Coca-Cola Co. and Intel Corp.

The earnings reports that investors parsed through on Thursday were not as auspicious.

Nokia's U.S. shares fell nearly 11 percent in premarket trading after the Helsinki-based cell phone maker said Thursday that its profit rose by 25 percent, below expectations. It also said that its global market share is down slightly.

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Pfizer shares fell nearly 3 percent in pre-market trading, following the company's report that its first-quarter profit fell 18 percent due to competition from generics and falling sales of drugs including Lipitor, Norvasc and Zyrtec.

After Sallie Mae reported a loss late Wednesday and Merrill posted a loss early Thursday, the two financial services companies' shares were little changed in pre-market trading.

IBM was one bright spot on the earnings landscape, boasting a higher-than-expected 26 percent jump in profit. IBM shares rose more than 2 percent in pre-market trading.

Government bonds rose slightly in early trading Thursday. The 10-year Treasury note's yield, which moves opposite its price, dipped to 3.70 percent from 3.71 percent late Wednesday.

Oil prices continue to hit record highs, and recently surpassed the $115-a-barrel mark. In premarket electronic trading on the New York Mercantile Exchange, crude slipped 5 cents to $114.88 a barrel.

Gold prices rose, and the dollar was mixed against other major currencies.

Overseas, Japan's Nikkei stock average rose 1.92 percent. Britain's FTSE 100 fell 0.20 percent, Germany's DAX index rose 0.27 percent, and France's CAC-40 added 0.53 percent.


On the Net:

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

Nasdaq Stock Market: http://www.nasdaq.com/

[Associated Press; By MADLEN READ]

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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