Stocks brace for another rough day

NEW YORK (CNNMoney.com) -- Stocks could have another rough day Thursday following the release of a wholesale inflation report that came in well above expectations.

Nasdaq and S&P futures turned lower, pointing to a lower opening for stocks, after the government released the Producer Price Index at 8:30 a.m. ET.

The government said producer prices rose 1.3 percent in February after declining 0.6 percent in January. Economists surveyed by Briefing.com had expected a gain of just 0.5 percent. (Full story)

The PPI report comes the day before the more closely watched Consumer Price Index, the government's key inflation reading that measures prices at the retail level.

Investors will also be bracing for more volatility a day before the so-called quadruple witching day Friday, when a full range of options expire. The day before those options expire can often be a volatile day in the market, especially during a period of wide swings in stocks as has occurred recently.

Some market experts said that the volatility in stocks already this week could be a sign that investors are already positioned for the options expirations, which could make the markets somewhat less volatile today.

"I think people have already been winding and unwinding," said Jason Leander, vice president at Rothschild Investment Corp. "I wouldn't be surprised by tight ranges here the next couple of days."

But Peter Cardillo, chief market economist for Avalon Partners, said that while the options are at least partly priced into stocks already, there could be a lot more volatility Thursday.

"I expect more volatility this week, especially if the economic numbers are not friendly," he said. "I'm not looking for a major runup or major selloff. But that doesn't mean we won't have a volatile session."

Overseas, major stock indexes all closed higher in Asia, as stocks followed the rebound on Wall Street Wednesday. Major indexes were also higher in Europe in early trading.

Oil was higher. U.S. light crude rose 28 cents to $58.44 a barrel in electronic trading.

Treasury prices were narrowly lower, lifting the yield on the U.S. 10-year note to 4.54 percent from 4.53 percent late Wednesday. The dollar was little changed against the euro and higher against the yen.

In corporate news, Internet search engine Google (Charts) plans to step up privacy protections for its customers by making its records of past queries anonymous after no longer than two years.

Chiquita Brands (Charts) agreed to pay $25 million late Wednesday after it pleaded guilty to federal charges that it engaged in transactions with a terrorist organization, in this case a right-wing paramilitary group in two areas of Colombia where it grows bananas.

General Motors (Charts) is bringing back a zero-interest rate financing offer on many of its cars and light trucks as it tries to spur sales.

Cadbury Schweppes (Charts) announced plans Thursday to split its candy and American soft drink business into two separate companies, a move that could bring bids from rivals or private equity groups.

Published reports Thursday say that Wal-Mart Stores (Charts) is changing the leases with some of its tenants, which include some banks, to say it was now reserving the right to become a full-service bank, including the underwriting of mortgages, and offering debit cards and insurance.

Wall Street firm Bear Stearns (Charts) reported slightly better than forecast earnings. Its statement said that residential mortgage-related revenues decreased from a year earlier, although it did not give any more details about problems in the subprime mortgage sector. It has a conference call scheduled for 10 a.m. ET.

Assurances from Lehman Brothers (Charts) about its own subprime problems when it reported results Wednesday helped to lift markets that have become focused on rising defaults and delinquencies in those loans.

Conglomerate General Electric (Charts) and private equity firm Blackstone Group announced they will team together to buy PHH Corporation (Charts) for $1.8 billion, a 13 percent premium over its close Wednesday.

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