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Futures Slump After Economic News

Stock index futures fell briefly and then recovered to still lower levels after the release of a slew of economic data showing jobless claims remain high—despite a drop in the last week—inflation pressures are on the rise, and retail sales are slowing.

Retail sales rose 0.5 percent in April from an upwardly revised 0.9 percent gain in March, the smallest gain in nine months, the Commerce Department reported Thursday. Economists surveyed by Reuters had forecasted retail sales to rise 0.6 percent.

Jobless claims fell by 44,000 to 434,000 in the week ended May 7, according to the Labor Department. The number of claims remains above the critical 400,000 level considered the top level of a healthy job market. Economists forecasted claims would drop to 430,000.

The producer price index rose to 0.8 percent in April, from 0.7 percent gain in March, the Labor Department said. Core producer prices, stripping out food and energy costs, rose 0.3 percent in April, the same gain seen in March. Economists surveyed by Retuers forecasted core producer prices to rise 0.2 percent.

Futures pointed lower ahead of the economic news as global markets continued to reel from plunging prices for oil and other commodities. On Wednesday, U.S. markets sank about 1 percent on news that demand for oil and gasoline has slacked amid soaring prices.

Adding to investor concerns were results from Cisco , which warned it would perform worse than analysts had expected this quarter.

Commodities dropped on Wednesday and stocks sank on worries about global growth and the European sovereign debt crisis.

Asian andEuropean marketsfell on Thursday as a renewed selloff in commodities unsettled investors. Oil and gas stocks and miners fell.

Executives of major oil companies, including Chevron, BP, Shell, ConocoPhillips and ExxonMobil are testifying before a Senate committee on a proposal to eliminate tax breaks for the industry.

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Federal Reserve Chairman Ben Bernanke will update Congress on Thursday on major financial reforms at 9:30 a.m.

FDIC Chair Sheila Bair and SEC Chair Mary Schapiro will also testify at the Senate Banking hearing on the implementation of Dodd-Frank bank reform legislation.

On the Calendar This Week:

THURSDAY: Business inventories, 30-year Treasury bond auction, money supply, NPD video game sales, Ford shareholder meeting, options industry conference; earnings from Nordstrom after-the-bell.
FRIDAY: CPI, consumer sentiment, Transocean shareholder meeting; earnings from Petrobras after-the-bell.

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