MarketWatch.com - Pre-Market Indications

Friday, January 15, 2010

Indications: U.S. stock futures dip after economic data

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By Steve Goldstein & Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures, ahead of key earnings reports including technology bellwether Intel Corp., posted modest losses Thursday after December retail sales unexpectedly fell and weekly jobless claims climbed.

Stock futures were only slightly lower after the government reported first-time jobless claims came in higher last week, yet the four-week average of filings for unemployment benefits compiled by the Labor Department fell. Read more about the positive trend.

Separately, the Commerce Department reported U.S. retail sales fell 0.3% in December. See full report on unexpected decline.

Also, other government data had U.S. import prices holding flat in December, with export prices rising 0.6%.

S&P 500 futures fell 2.3 points to 1,139.30, while while Nasdaq 100 futures fell 5.75 points to 1,876.75. Futures on the Dow Jones Industrial Average declined 19 points to 10,609.

U.S. stocks rose Wednesday as a positive Credit Suisse note on pharmaceuticals including Merck and GlaxoSmithKline and a Federal Reserve report showing signs of an improving economy offset concerns that Google may exit China. The Dow Jones Industrial Average rose 54 points, the S&P 500 added 9 points and the Nasdaq Composite jumped 26 points.

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The U.S. Treasury will be selling $13 billion in 30-year notes later Thursday.

Earlier, the European Central Bank as expected kept interest rates at 1%, and ECB President Jean-Claude Trichet said the euro-zone's economic recovery would remain uneven.

After the close, Intel /quotes/comstock/15*!intc/quotes/nls/intc (INTC 21.48, +0.52, +2.48%) , the world's largest microchip maker, is due to report fourth-quarter financial results. Fellow blue chip J.P. Morgan Chase /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 44.69, +0.44, +0.99%) reports on Friday.

"Perhaps equities are looking forward to the real start to earnings season today with Intel reporting after the U.S. closing bell and leading us into J.P. Morgan's results," said Jim Reid, strategist at Deutsche Bank.

The financial services industry also will be in the spotlight as the Obama administration is due to propose a special 10-year fee on large financial companies to repay taxpayers. The assessment on excess liabilities at big firms is designed to raise about $90 billion over 10 years, and the annual assessment would be approximately 15 basis points, or 0.15%, of the firm's liabilities excluding its Tier 1 capital, according to an anonymous White House official.

Also drawing attention, Hershey /quotes/comstock/13*!hsy/quotes/nls/hsy (HSY 36.96, +0.35, +0.96%) has authorized a bid for Cadbury /quotes/comstock/13*!cby/quotes/nls/cby (CBY 51.84, -0.05, -0.10%) , the U.K. chocolate producer trying to fight off a hostile takeover bid from Kraft Foods /quotes/comstock/13*!kft/quotes/nls/kft (KFT 29.12, -0.11, -0.38%) , according to a Financial Times report.

Metals giant Rio Tinto /quotes/comstock/13*!rtp/quotes/nls/rtp (RTP 237.86, +3.92, +1.68%) reported a 49% jump in iron-ore output due to Chinese demand. Iron ore is a key ingredient in making steel.

In technology, software giant SAP /quotes/comstock/13*!sap/quotes/nls/sap (SAP 50.16, -0.23, -0.46%) , a key rival of Oracle /quotes/comstock/15*!orcl/quotes/nls/orcl (ORCL 25.34, +0.59, +2.38%) , reported declining sales and margins for the fourth quarter but said the results topped analyst estimates.

Among retailers, Zale /quotes/comstock/13*!zlc/quotes/nls/zlc (ZLC 2.99, -0.24, -7.43%) may see pressure after announcing that three top executives abruptly left the jewelry company.

Asian markets finished mainly higher overnight, buoyed by Wall Street's move higher Wednesday, as concerns over further monetary tightening in China eased. Stronger-than-expected Australian jobs data also lifted shares in Sydney.

Rio Tinto's upbeat report also helped the pan-European Dow Jones Stoxx 600 to rise 0.6%.

Oil futures traded near $80 a barrel, and gold futures tilted mildly higher at $1,140.80 an ounce.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 77.02, +0.29, +0.38%) surrender earlier gains to stand at 76.83.

Steve Goldstein is MarketWatch's London bureau chief. Kate Gibson is a reporter for MarketWatch, based in New York.


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