NEW YORK – Wall Street headed toward a lower open Thursday as investors began sifting through retail sales reports that were expected to point to another pullback in consumer spending.
The first November sales reports issued by retailers were mixed, but Costco Wholesale Corp., usually a strong performer, said it had a drop in same-store sales twice as large as analysts forecast. Overall, sales are expected to be grim, especially after initial reports indicated that Thanksgiving weekend results weren't strong enough to save the month for retailers.
Same-store sales, which track business at stores open at least a year, are the mostly widely followed measure of retailers' health.
Consumer spending is of particular concern for investors, as it accounts for more than two-thirds of U.S. economic activity. Wall Street fears consumer spending won't be able to help prop up the still-weakening economy.
Meanwhile, the government will be reporting weekly numbers on new claims for unemployment benefits; the market expects claims to have risen moderately last week and remain near a 16-year high.
The Labor Department's data is scheduled to be released at 8:30 a.m. EST.
Investors are likely to be on edge as they await Friday's release of the department's November jobs report. So far, employers have eliminated jobs every month this year, shedding 1.2 million positions through October. That has sent the unemployment rate to a 14-year high of 6.5 percent.
Investors are likely to remain anxious ahead of Friday's November employment report, which is expected to show that job losses climbed to 320,000 and the unemployment rate hit 6.8 percent in November, according to economists surveyed by Thomson Reuters.
Also Thursday, the country's top three automakers are returning to Congress for hearings they hope will persuade skeptical lawmakers to save their troubled industry. General Motors Corp., Ford Motor Co. and Chrysler LLC are seeking $34 billion in emergency aid. While the companies are likely to receive a less-than-friendly reception on Capitol Hill, investors largely expect some sort of resolution for the ailing carmakers.
Dow Jones industrial average futures dipped 39, or 0.45 percent, to 8,540. Standard & Poor's 500 index futures fell 2.40, or 0.28 percent, to 866.10, while Nasdaq 100 index futures rose 0.25 or 0.02 percent, to 1,156.25.
On Wednesday, Wall Street looked past another stream of bad economic news and finished sharply higher after fluctuating between positive and negative territory for most of the day. Investors vacillated between pessimism about the recession and hopes that the economy might turn around soon.
Aside from a 680-point plunge on Monday, the Dow Jones industrial average has closed higher in eight of the last nine sessions, leading some analysts to believe that some stability may be returning to the market after months of extreme volatility.
Bond prices rose early Thursday, again sending yields to new lows as investors sought the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.60 percent from 2.67 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.01 percent from 0.02 percent late Wednesday.
The dollar rose against other major currencies. Gold prices fell.
Light, sweet crude fell $1.05 to $45.74 a barrel in premarket electronic trading on the New York Mercantile Exchange. Crude, which soared to a record $147.27 in July, is now trading at its lowest levels in four years, having plunged in response to the weakening global economy.
European markets got a boost after a handful of central banks, including the Bank of England, made significant interest rate cuts.
Japan's Nikkei stock average fell 1.00 percent. In afternoon trading, Britain's FTSE 100 rose 0.15 percent, Germany's DAX index was up 1.63 percent, and France's CAC-40 was up 1.28 percent.