Stocks headed for a lower open Thursday after the Federal Reserve cut its outlook for the economy and jobless claims fell.
Initial jobless claims dropped by 12,000to a seasonally adjusted 631,000 last week, slightly higher than expected. Continuing claims surged to another record.
Still to come: April’s leading indicators and the Philadelphia Fed survey for May are due out at 10 am ET.
The minutes from the Federal Open Market Committees’ last policy meeting revealed the pessimistic outlook Wednesday and gave investors doubts over the prospects for stocks. The Fed does expect the economy to improve over the next few months, however.
“We’re certainly at a point now when these so-called green shoots have to actually develop into some kind of actual plants,” Steve Massocca, managing director of Wedbush Morgan, told CNBC.
For this stock-market rally to continue, we’re going to have to see some actual improvements in the economy, Massocca added.
European stocks were mostly in the red, with the FTSE leading the declines after ratings agency Standard & Poor's slashed its outlook on the UK economy to negative. The news raised fears over the strength of the UK’s ‘AAA’ sovereign credit rating.
Treasury Secretary Timothy Geithner will return to the stage after his bullish comments on the state of the financial sector Wednesday, appearing before the House Appropriations subcommittee at 10 am.
And Philadelphia Fed President Charles Plosser will speak on the economic outlook at 7 pm in New York.
In other news, Robert Kidder will become the new chairman of Chrysler when the troubled automaker pulls out of bankruptcy and merges with Italian auto-maker Fiat.
Investors will also be watching to see how OpenTable performs at its initial public offering. The online restaurant reservation service priced its shares at $20 late Wednesday, raising $60 million. It's the first Nasdaq IPO of 2009.