Futures Go Negative on Weak Economic Signs

Stock index futures slipped after higher readings in weekly jobless claims and inflationpointed to more headwinds for the economic recovery.

The government reported that 473,000 workers filed claims for unemployment insurance last week, well above the 445,000 expected, while consumer prices in January spiked 1.4 percent—0.3 percent with volatile energy and food prices stripped out. Both inflation readings were higher than economists had forecast.

Futures, which had been flat ahead of the reports, quickly sold off and demand for Treasurys increased and the dollar weakened against the yen.

At the same time, mostly positive earnings reports failed to stoke investor confidence.

Wal-Mart Stores reported profit of $1.17 a share that, though higher than analyst estimates, disappointed investors with weaker than expected revenueand a cautious outlook. Shares fell about 2 percent in premarket trading.

Also in earnings, Goodyear Tire posted results that beat Wall Street expectations, sending its shares up about 4 percent, while Hormel also reported a higher profit.

In company news, US regulators have denied approval to XenoPort and GlaxoSmithKline for a drug to treat restless leg syndrome. Tests found a potential link to cancer found in rats. XenoPort shares tumbled 62 percent on the news.

Technology shares were faring somewhat better.

Dow component Hewlett-Packard was up 1 percent premarket after it beat estimates with its latest earnings reported after the bell Wednesday and raised its guidance for the year. Semiconductor equipment maker Applied Materialsalso beat estimates and raised guidance and its shares also gained about 1 percent.

Elsewhere in earnings, Barrick Gold said its profit more than doubled due to stronger gold prices, while the company is spinning off its African operations. Shares slipped about 1 percent premarket.

Looking to the economy, the Labor Department releases its weekly report on initial jobless claims at 8:30 am New York time, with economists expecting 445,000 new claims, compared with last week's reading of 440,000.

At the same time, the January Producer Price Index (PPI) will be out, with consensus forecasts calling for a rise of 0.9 percent following a 0.2 percent rise in December. The core rate, which excludes food and energy, is expected to show a gain of 0.1 percent compared to December's unchanged reading.

At 10 am, the widely watched Philadelphia Fed index is out, with a reading of 15.0 expected for February. That's slightly lower than the 15.2 registered in February. Also at 10, the Conference Board issues its index of leading economic indicators for February, with a 0.4 percent rise considered likely following January's 1.1 percent increase.

The Energy Information Administration releases two weekly inventory reports: natural gas at 10:30 am, and crude oil at 11 am. The oil report was delayed a day by the President's Day holiday.

Gold prices may also be active, as the International Monetary Funded announces plans to sell its remaining gold.

- Written by Peter Schacknow, Senior Producer, CNBC Breaking News Desk.