Futures Surrender Gains Following Jobs News
Stock futures surrendered earlier gains after a government report showed a surprise gain in the number of people filing for unemployment benefits.
nitial claims for state unemployment insurance benefits
rose 15,000 to a seasonally adjusted 576,000
in the week ended Aug. 15 from 561,000 the prior week.
Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000.
Before the report was released futures had indicated a modest gain for stocks at the opening bell. Futures turned flat following the report.
Wednesday's modest gains for stocks—coming after sharply lower stock index futures and slumping overseas markets had pointed to losses—were seen by many as a sign that investors may jump on any opportunity to get into the market. The Dow erased an 86-point loss yesterday to finish higher by 61 points.
The market was grappling with more negative signs.
Sears Holdings posted earnings that badly missed expectations on a loss of 17 cents a share driven by weak sales. Shares fell more than 4 percent in premarket trading, while major indexes came off their morning highs.
At 10 am, the Conference Board is out with its monthly Index of Leading Economic Indicators. Consensus forecasts call for an increase of 0.6 percent for July. We'll also get the widely-followed Philadelphia Fed index at the same time. At 10:30 am, the Energy Department is out with its weekly look at natural gas inventories.
World stock markets rose, with China erasing its troubling 5 percent drop from the previous day. The British, German and French markets each gained at least 1.4 percent.
Some other fairly notable earnings reports are out this morning before the opening bell, including H.J. Heinz, and Hormel Foods .
After the bell, investors will get quarterly numbers from retailer Gap and software publisher Intuit .
Google could be a stock to watch this morning, as Goldman Sachs adds it to its "conviction buy" list, saying revenue growth could return to the high teens over the next four quarters.
In a development that may or may not impact oil trading, Hurricane Bill has been downgraded to a Category 3 storm, although hurricane watchers say it does have the potential for an upgrade back to Category 4.
Oil prices inched lower to near $72 a barrel.
And several reports say the White House will trim its budget deficit forecast for the current fiscal year next week—cutting the projected shortfall by about $262 billion to $1.58 trillion. However, that would still be a record.
The lower number would come from the erasure of a contingency fund that had been set aside for more Wall Street bailouts, which will now apparently not be needed.
- Written by Peter Schacknow, Senior Producer, CNBC.com