NEW YORK (CNN/Money) - Consumer spending tumbled going into the holiday shopping season, according to a report that may further unnerve investors early Thursday following another sales and bottom line warning from Lucent Technologies.
Indications point to a lower opening for the major stock indexes.
A slowdown in auto sales sent retail sales tumbling 3.7 percent in November. That's well below the expectations of economists surveyed by Briefing.com, who expected a 3.1 percent drop.
"This is crucial, we need consumers to hang in there in order for the economy to snap back," David Kelley, economist at Putnam Investments, told CNNfn's Before Hours.
Separately, inflation remained non-existent. The Producer Price Index fell 0.6 percent in November, a bigger decline than the 0.4 percent drop forecast.
But the labor market appeared to improve. The government said the number of Americans filing for first-time jobless claims fell to 394,000 last week from a revised 480,000 a week earlier.
The numbers come two days after Federal Reserve policy makers cut interest rates for the 11th time this year to get consumers and business spending again.
Lucent (LU: Research, Estimates) , the troubled telecom manufacturer, lowered fiscal first-quarter projections saying it now anticipates a loss of 23 cents to 26 cents a share, far wider than the 17 cents a share Wall Street had anticipated.
The company's shares fell 73 cents to $7 in before-hours trading.
The Dow Jones industrial average begins the day at 9,894.81 after a 6-point gain Wednesday. The Nasdaq composite index is at 2,011.38 following a 9-point rise, while the Standard & Poor's 500 starts at 1,137.07 after a slight advance.
Stocks have rallied this autumn as investors project better economic times ahead.
"The stock market is sniffing that things are bottoming out," Henry Wilmore, chief U.S. economist at Barclays, told CNNfn's CNN Money Morning
The Dow industrials are up 20 percent since the market's low following Sept. 11, while the Nasdaq has gained 41 percent.
Asian stocks finished broadly lower Thursday, with Tokyo's Nikkei index down more than 3 percent. European stocks also fell.
Treasury prices rose in early trading, dropping the yield on the 10-year note to 4.97 percent from 4.99 percent late Wednesday. The dollar gained slightly against yen and was little changed versus the euro. Brent oil futures gained 28 cents to $18.74 a barrel in London.
Dow component United Technologies (UTX: Research, Estimates) said after the market closed Wednesday that it expects to meet lowered earnings estimates for its fourth quarter and surpass forecasts for 2002. The maker of Pratt & Whitney engines, Otis elevators and other products lost $1.44 to $59.50 in regular trading.
After the close Thursday, Oracle (ORCL: Research, Estimates) is expected to report its fiscal second-quarter earnings. Analysts surveyed by First Call forecast a decline to 10 cents a share from 11 cents a year earlier. Oracle shares lost 11 cents in before-hours Thursday to $14.99.
Employers continued cutting payrolls. Insurer Aetna (AET: Research, Estimates) said it would slash 6,000 jobs, or 16 percent of its work force, and Applied Materials (AMAT: Research, Estimates) the largest maker of equipment used in the production of microchips, said it would cut another 1,700 jobs, or about 10 percent of its payroll.
Applied shares dropped 77 cents to $44.10 in before-hours trading Thursday, while Aetna gained 40 cents to $31.84 Wednesday.
The nation's unemployment rate rose to a six-year high last month, the government said, as employers shed more than 300,000 jobs.
A closely watched IPO is set to trade Thursday. Ending more than 125 years as a private company, Prudential Financial priced 110 million shares at $27.50 each, raising $3 billion. The company will use the ticker symbol "PRU." 
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