Futures Pare Losses After Retail Sales

Futures started the day lower Thursday but pared losses after a better-than-expected report on retail sales.

Retail sales fell 0.1 percent in February as a rise in gasoline prices offset a slump in auto sales. And, if you exclude auto sales, retail sales rose 0.7 percent.

Economists had expected declines of 0.5 percent and 0.2 percent, respectively.

And initial jobless claims rose by 9,000 last week to 654,000, well above the 645,000 expected. Continuing claims, which smooth out weekly fluctuations, hit a new record.

Still to come: A report on January business inventories at 10 a.m. ET and a congressional hearing on the mark-to-market accounting rule which many have blamed for exacerbating the financial crisis.

Prior to the economic reports, futures had pointed to a lower open as fears over the world's economic health returned.

The global economy may shrink 1-2 percent this year, World Bank President Robert Zoellick said, as revised Japanese data confirmed the world's No. 2 economy suffered its deepest slump since the oil shock of 1974.

After a fierce battle that started last summer, Swiss drugmaker Roche finally clinched the deal to buy the 44 percent of the US biotech group it doesn't already own after Genentech's board recommended shareholders accept the increased cash offer. The total value for the deal is $46.8 billion, or $95 a share.

Genetech shares gained 2.4 percent in premarket trading, while Roche rose 3.1 percent.

Bank shares were leading futures lower, with Citigroup giving back some of its rally this week and falling 6.5 percent and Bank of America off 5.5 percent.

European stocks were in the red and Asian markets closed mixed.

Home foreclosures resumed their upturn last month after a brief dip, despite numerous programs meant to quell the record pace of failing mortgages, RealtyTrac reported.

Filings, which include notice of default, auction sale or bank repossession, rose 6 percent in February after slipping 10 percent in January, and leaped 30 percent from a year ago, the Irvine, California-based real estate data firm said.

One in every 440 households with loans drew a filing last month, RealtyTrac said.

All eyes are on the hearing of alleged Ponzi scheme author Bernard Madoff, with new details emerging.

Madoff's little-known London trading firm was used for laundering client money, according to the US government's criminal charges, the Wall Street Journal reported on its Web Site.

Freddie Mac reported a net loss of $23.9 billion, nearly 10 times that of a year ago. The loss followed $25.3 billion in red ink for the third quarter of 2008, it said in a statement.