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Thursday, February 25, 2010

Indications: U.S. stock futures fall further after jobs data

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By Kate Gibson & Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures weakened Thursday as markets took a cautious tone ahead of the second day of congressional testimony from Federal Reserve Chairman Ben Bernanke and after mixed economic data.

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S&P 500 futures fell 10.1 points to 1,093.5 and Nasdaq 100 futures fell 14.5 points to 1,799.5. Futures on the Dow Jones Industrial Average dropped 83 points to 10,272.

Stock futures fell further after early economic data had the count of those filing first-time claims for jobless benefits unexpectedly rising last week, while orders for U.S.-made durable goods jumped 3% in January.

Snowstorms and other events in recent weeks have distorted the jobless data, rendering it less reliable, said Dan Greenhaus, chief economic strategist at Miller Tabak.

Still, "it is quite clear that the labor market remains quite stressed with various indicators still suggesting robust employment growth remains elusive," Greenhaus said.

U.S. stocks climbed Wednesday as Bernanke soothed markets by repeating a low-interest-rate pledge, sending the Dow Jones Industrial Average up 91 points, the Nasdaq Composite up 22 points and the S&P 500 up 10 points.

Greece remained in the spotlight as Standard & Poor's during Wednesday's session threatened the nation was on the verge of junk status within a month, while Moody's said it would keep the rating unchanged if promised spending cuts by the government are enacted.

The Greek jitters sent investors away from the euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.35, -0.01, -0.47%) , which fell to the low $1.35 area, and to government bonds, which rose in the U.S. and Germany.

Emerging Markets Hit Speed Bump

Financial troubles in Southern Europe and unrest in Turkey threaten investors in developing markets, says David Riedel, president of emerging-market analysts Riedel Research. MarketWatch's Jonathan Burton reports.

"The warnings from the credit agencies highlight the lack of an explicit E.U. backstop facility for Greece if market pressures intensify within the current impossibly difficult timeframe for the Greek government," said Lena Komileva, head of G7 market economics for Tullett Prebon in London. "Since the lack of a backstop facility for Greece explicitly links the euro to Greek policy risk, the market's appetite for cyclical trades has shifted from the axis of the Fed's ample liquidity provision to the tangent of credit quality at risk along the euro-zone periphery."

Europe stocks, however, wavered between gains and losses, after a number of forecast-beating results from companies including the Royal Bank of Scotland /quotes/comstock/13*!rbs/quotes/nls/rbs (RBS 11.62, +0.49, +4.40%) and Aegon /quotes/comstock/13*!aeg/quotes/nls/aeg (AEG 5.95, +0.03, +0.46%) . See related Europe Markets.

In the U.S., Coca-Cola /quotes/comstock/13*!ko/quotes/nls/ko (KO 52.63, -2.53, -4.59%) announced a deal to buy Coca-Cola Enterprises /quotes/comstock/13*!cce/quotes/nls/cce (CCE 25.70, +6.52, +33.99%) North American bottling operations in a deal that's "substantially cashless."

Coca-Cola Enterprises shot up nearly 29% in pre-market trade. Coca-Cola fell 3%.

Asian markets generally slipped, with the Nikkei 225 down 1% in Tokyo and the Hang down 0.3% in Hong Kong.

Oil futures were below $80 a barrel and gold was below $1,100 an ounce.

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


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