U.S. Stocks To Open Lower; Retail Sales Reports In View
NEW YORK (MarketWatch) -- Stocks are set to open lower Thursday, as investors pause to gauge the strength of first-quarter earnings reports, but Wal-Mart's stock might well benefit from news that the mega-retailer's monthly same-stores sales reports handily beat expectations.
The futures contract for the Dow Jones Industrial Average last was down 22 points at 12,532.
Futures contracts for the S&P 500 and the Nasdaq 100 last were off by 2.80 points and 4.2 points, respectively, to 1,445.80 and 1,808.5
On Wednesday, stocks ended lower, with the Dow industrials breaking an eight-day winning streak, after the minutes from the latest Federal Open Market Committee meeting dashed hopes that the inflation-focused policymakers would be inclined to cut interest rates anytime soon.
On Thursday, investors will continue to parse the Federal Reserve's intentions on rates while focusing on a first-quarter earnings season that many analysts believe will feature only mediocre rates of growth.
"We're looking at a lower opening," said Peter Cardillo, chief market analyst at S.W. Bach. "We had news that import prices went through the roof. As earnings season gets into full gear, we may see the market suffer a pullback of 3% to 5%. ""The Fed has indicated it will not loosen rates any time soon, removing a positive catalyst from the market," he said. "But the catalyst for the pullback is most likely to be negative corporate-earnings guidance. "
Worries that the next move by the Fed could in fact be a rate increase were reinforced by news that import prices in March rose by 1.7%, the largest gain in 10 months.
The gain was far above the 0.6% expected by economists surveyed by MarketWatch. Outside of fuels, however, imported inflation was modest, rising 0.2%.
In other data, the Labor Department reported that first-time filings for state unemployment benefits rose by 19,000 in the week ended April 7 to 342,000, the highest in eight weeks.
The more-reliable four-week average of new claims -- which smoothes out distortions from events such as weather or holidays -- rose by 7,000, to 323,250, the highest in three weeks.
Stocks in motion
Shares of Research In Motion were off 6.7% at $136.32 ahead of the bell. The BlackBerry maker reported financial results late Wednesday in which sales just missed Wall Street forecasts and management's profit forecast left some analysts disappointed.
The company also announced that an informal probe by the Securities and Exchange Commission into its past stock-option accounting practices had been upgraded to a formal inquiry.
Separately, Genentech said first-quarter profit surged 68% and sales rose 43% from the same period a year ago even as sales of two of its key cancer treatments came in lower on a sequential basis. The biopharmaceutial company's stock was off 0.5% at $82.29 before the opening.
Subprime mortgage lender NovaStar Financial Inc. said it is considering new strategic alternatives and is open to being purchased. The stock shot up 15.7% to $5.82 before the bell.
Similarly, MedImmune Inc. said it's considering alternatives, immediately boosting the company's stock.
Meanwhile, Wal-Mart Stores Inc. saw its blue-chip stock rise 1% to $47.76 before the open. The company had a 4% rise in March same-store sales. Analysts, on average, had expected its same-store sales to rise 1.6%.
The company added that while reaching its internal first-quarter earnings target "is still attainable, given the tough sales environment for the April period, it will be a challenge."
Also playing off retailers sales results, Costco Wholesale Corp shares rose 1.7% to $54.95 before the opening. Costco's March same-store sales also beat expectations.
Pier 1 Imports announced a larger year-over-year-quarterly loss due to special charges and a decline in first-quarter sale store sales. Howeer, excluding the charges, the company's results would have beat expectations. The stock rose 7% to $8.40 ahead of the bell.
Other markets
The rise in jobless claims alleviated some concerns in the Treasury market about the unexpectedly robust jobs growth reported for March last week. The benchmark 10-year note last was up 5/32 at 99 10/32 with a yield of 4.714%.
The euro trimmed some of its gains against the dollar after the European Central Bank held interest rates steady at 3.75%, as expected, and dented hopes of a rate hike in May. ECB chief Jean-Claude Trichet said monetary policy remains accommodative.
The euro was last up 0.2% at $1.3457, while the dollar was down 0.04% at 119.24 yen.
Gold futures made grudging gains tied to the movement in the greenback. Gold for June delivery added 40 cents at $682.10 an ounce on the New York Mercantile Exchange.
In energy, crude-oil futures rose, drawing support from the greater-than-expected decline in gasoline supplies reported by the government on Wednesday.
Crude oil for May delivery gained 76 cents, or 1.2%, at $62.77 a barrel in electronic trading.
By Leslie Wines