Economic jitters could hurt stocks

NEW YORK (CNNMoney.com) -- U.S. stocks were set to open lower Thursday, a day after the Federal Reserve raised concerns about a weaker economy and a day before the government's closely watched monthly employment figures.

At 7:55 a.m. ET, Nasdaq and S&P futures were down.

Oil prices were lower ahead of the weekly report on U.S. fuel inventories, due from the Energy Department at 10:30 a.m. ET. U.S. light crude was down 9 cents to $58.23 a barrel in electronic trading.

Treasury prices were little changed, after rebounding Wednesday on the release of the Fed's December policy-making minutes that showed the growing concern of the central bank about economic strength. The 10-year note yield stood at 4.66 percent.

U.S. stocks were mixed Wednesday, with big gains pretty much evaporating following the release of the Fed minutes.

David Kelly, economic advisor for Putnam Investments, said he thinks the hit to momentum Wednesday is still overhanging futures, and that investors are likely to be cautious Thursday ahead of the Friday employment report from the Labor Department.

Kelly said a survey released Wednesday from ADP that showed private sector payrolls shrinking in December has investors cautious about trading Thursday.

"I don't expect the markets to do much today. It's going to be held hostage by tomorrow's employment report," said Kelly.

Throughout the morning Thursday the major retailers have been reporting sales in December. Analysts surveyed by sales tracker First Call forecast that sales at stores open at least a year, a closely watched retail measure known as same-store sales, gained 3 percent, slightly below the 3.3 percent rise seen in December 2005.

No. 1 retailer Wal-Mart Stores (Charts) reiterated a weekend report that December same-store sales were up 1.6 percent, which was better than forecasts of a 1 percent rise. The company also said Thursday it is looking for January same-store sales to rise between 1 to 2 percent, and it reaffirmed its fiscal fourth-quarter earnings guidance.

Early Thursday, wholesale club Costco (Charts) reported a 9 percent gain in same-store sales, far better than the forecasted 5.7 percent rise.

Teen retailer American Eagle Outfitters (Charts) announced late Wednesday that its same-store sales were up 13 percent in December, easily topping the 8.7 percent forecast. It also raised its fourth-quarter earnings guidance by a penny a share, but its new guidance was only at or below the consensus forecast. Shares slipped 0.7 percent on the announcement.

Another teen retailer, Hot Topic (Charts) announced late Wednesday that its same-store sales fell 5.1 percent, which was worse than forecasts of a 3.4 percent drop. It also slashed its fourth-quarter earnings guidance to well below forecasts. Its shares plunged more than 13 percent in after-hours trading on the news.

Other companies making news overnight included Cisco Systems (Charts), which announced early Thursday it is buying Web messaging and e-mail security firm IronPort Systems Inc. for $830 million.

Ford Motor (Charts) CEO Alan Mulally said Wednesday evening the struggling automaker is doing well in its restructuring efforts, including plans to sell its Aston Martin unit. He also did not rule out a sale of the money-losing Jaguar brand as well.

Mullaly also said his visit with Toyota's CEO was not a prelude to an alliance or other combination with the Japanese automaker, and he said painful concessions will be needed from the United Auto Workers union if his company is to compete in the tough auto industry.

The Wall Street Journal reported that Toyota (Charts) is close to naming a site in the Southern U.S. for its eighth North American assembly plant, with the announcement coming as early as this month.

Economic reports Thursday including the weekly report on initial jobless claims, which is due at 8:30 a.m. ET. At 10 a.m. comes a reading on factory orders in November and the survey of service sector executives from the Institute of Supply Management.

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