Futures Struggle After a Weak Jobs Report


U.S. stock index futures pointed to a lower open Thursday after the government reported a jump in unemployment claims.

The news was disheartening to investors who had hoped to see signs of job growth in the weekly figures.  

"It's nice that Fortune 500 companies are sitting on $2 trillion in cash and the potential of more buyouts may be on the horizon (i.e., Potash/BHP, Intel/Mcafee), but it still doesn't cure the underlying problem of limited job creation in the U.S.," said Todd M. Schoenberger, managing director LandColt Trading.

"Companies are not using this cash to add to payrolls, and eventually this will be the primary reason why we may return to recessionary times," Schoenberger said. "Bonds and cash seem to be the most logical place to be for the immediate future."

Investors also have their eyes on Intel , which announced Thursdayit will acquire software and computer security company McAfee. Intel is trading lower in pre-market trading, while McAfee is soaring. Symantec , another software and computer security company, is also rising on the news.

In other economic news, the Conference Board will issue its index of leading economic indicators at 10 a.m., and the Philadelphia Fed releases its monthly economic survey. The LEI index is seen rising 0.2 percent for July, reversing a drop of the same size for June, while the Philly Fed's index is forecast to rise to an August reading of 7.0 from July's 5.1.

Also on the economic front, St. Louis Federal Reserve President James Bullard is scheduled to speak in Arizona at 1 pm in Rogers, Arkansas, with the economic outlook and monetary policy on the agenda.

And the Congressional Budget Office will release its latest projections on the U.S. budget deficit later. In July, the deficit for fiscal 2010, which ends Sept. 30, was estimated at a record $1.47 trillion.

In earnings news, Sears narrowed its second-quarter loss from a year earlier thanks to results at Kmart, but the figures were still short of analyst estimates. The retailer lost 36 cents a share, excluding certain item, which is twice as much as expected on average from analysts surveyed by Thomson Reuters.

Staples'second-quarter net income rose40 percent, as expected, but sales were flat, below analysts expectations. The office-supply retailer sees a modest boost in the second half of the year.

Williams-Sonoma reported a strong quarterly profit report as it raised its outlook for the full-year. Net profit at the owner of high-end cookware stores and Pottery Barn furnishings stores rose to $30.8 million, or 28 cents a share, in the second quarter. The company earned 31 cents a share, excluding certain item, beating the 22 cents estimate from analysts surveyed by Thomson Reuters.

Wednesday's after-the-bell earnings reports included Petsmart, whose shares rose in extended trading after it raised 2010 guidance, as did the stock of semiconductor-equipment makerApplied Materials and retailer Limited Brands after their earnings.

Retailer Hot Topic and data storage equipment maker NetApp released weak earnings reports after the bell.

Group of Securities

Hewlett-Packard, Dell, Gap, Intuit, and Aeropostale will issue their earnings results after the bell Thursday.

Group of Securities

In other company news, General Motorsfiled for an initial public offering of stock Wednesday, as expected. And SanDisk announced plans to sell at least $1 billion in convertible notes.

European stocks edged lower, but strong retail sales data from the UK helped stocks in the industry. Asian indexes ended in the green with Japanese stocks seeing strong gains.

On The Calendar:

THURSDAY: Leading indicators, Philadelphia Fed survey; earnings after the bell from HP, Dell, Gap and Intuit
FRIDAY: No major events scheduled

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