US Stocks Head for Lower Open after Rally

By: AP
By: AP
Wall Street appeared ready to take a break Wednesday, ahead of the Thanksgiving holiday, after a steep market rally. Stock futures pointed moderately lower as investors awaited reports on jobless claims and orders on big-ticket items.

The Wall St. street sign is photographed in front of the American flag hanging on the New York Stock Exchange prior to a NYC Central Labor Council rally for worker protections, Thursday, Sept. 25, 2008 in New York. (AP Photo/Mary Altaffer)

NEW YORKWall Street appeared ready to take a break Wednesday, ahead of the Thanksgiving holiday, after a steep market rally. Stock futures pointed moderately lower as investors awaited reports on jobless claims and orders on big-ticket items.

A pullback is to be expected given the magnitude of the rally that began Friday, giving the Dow Jones industrial average and the Standard & Poor's 500 index their first triple-session advances in more than two months. Tuesday's buying was more selective than in the prior two sessions, but was seen as a welcome sign of stability after months of violent swings in the market.

A spate of reports are due Wednesday, including figures on personal spending, orders to factories for big-ticket durable goods, new home sales and weekly applications for unemployment benefits. Investors will be looking to the data for further insight on the health of the economy.

Among the reports, the Labor Department is expected to show that initial unemployment-benefit claims declined by 5,000 last week to a seasonally adjusted level of 537,000, according to a survey of Wall Street economists polled by Thomson Reuters. Even with a decline, unemployment is expected to remain well above historical levels.

The report, which is arriving a day earlier than normal due to the holiday, is due at 8:30 a.m. EST.

The other reports due out Wednesday are also expected to show further weakness with orders to factories for big-ticket durable goods dropping by 3 percent and sales of new homes falling by 3 percent, according to the Thomson Reuters survey.

Ahead of the figures, Dow Jones industrial average futures fell 95, or 1.12 percent, to 8,350. Standard & Poor's 500 index futures fell 10.70, or 1.25 percent, to 840.50, while Nasdaq 100 index futures fell 0.75, or 0.07 percent, to 1,134.75.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.02 percent from 3.10 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.12 percent from 0.09 percent late Tuesday.

The dollar fell against other major currencies. Gold prices also fell.

Light, sweet crude rose 70 cents to $51.47 in premarket electronic trading on the New York Mercantile Exchange.

Investors are also anxious ahead of the unofficial start of the holiday shopping season, or Black Friday, which falls on Nov. 28 this year. The season, which accounts for as much as 40 percent of annual profits for many stores, is expected to be the weakest in decades, as consumers grapple with rising unemployment and rapidly declining household wealth.

A sharp decline in consumer spending has been among Wall Street's biggest concerns in the past few months, as it accounts for more than two-thirds of U.S. economic activity.

In another sign that retailers are struggling, luxury goods company Tiffany & Co. warned early Wednesday that 2008 results would come in below Wall Street's expectations, though it posted a better-than-expected third-quarter profit. The company also plans to cut jobs and trim capital spending as it expects weak demand to continue in the fourth quarter.

In other corporate news, American International Group Inc. said it received $40 billion from the Treasury Department as part of the government's latest plan to help the embattled insurer stay in business.

The money is part of a $150 billion financial-rescue package that the government pledged to AIG earlier this month.

Overseas, Japan's Nikkei stock average fell 1.33 percent. Britain's FTSE 100 fell 1.87 percent, Germany's DAX index fell 0.94 percent, and France's CAC-40 fell 3.33 percent.


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