Wall St.'s pain, jobless claims on investors' minds
Merrill's loss and weekly jobless claims put the kibosh on positive earnings sentiment.
NEW YORK (CNNMoney.com) -- Stocks appear headed towards a weak open Thursday as more losses at Merrill Lynch and signs of weakness in the labor market offset some stronger-than-expected corporate earnings.
At about 8:45 a.m. ET, Nasdaq and S&P futures were lower, suggesting a mixed or lower opening for stocks.
Weak financials: There were continued signs of earnings problems in the financial sector when student loan lender Sallie Mae (SLM, Fortune 500) posted a bigger-than-expected $104 million loss in the first quarter after the close Wednesday and said in the current loan environment it can not make profitable loans. Shares fell nearly 2% in early Frankfurt trading.
The bad news in finance continued early Thursday when Merrill Lynch (MER, Fortune 500) wrote down another $1.5 billion in the value of its assets and reported a net loss of $2.16 billion that was larger than expected. The nation's largest brokerage firm also announced it was cutting 4,000 jobs.
Strong quarters: Shares of IBM (IBM, Fortune 500) surged 1.5% in early Frankfurt trading after Big Blue posted strong quarterly results late Wednesday that easily topped the consensus estimates. The company also lifted its guidance for full-year results above Wall Street forecasts.
Online auction site eBay (EBAY, Fortune 500) also reported better than expected revenue and sales as it raised guidance for the year. Shares were up 0.4% in after-hours trading.
Mixed results: There were also mixed results from two Dow components reporting results early Thursday. Diversified manufacturer United Technologies (UTX, Fortune 500) posted improved earnings that topped forecasts. But drugmaker Pfizer (PFE, Fortune 500) saw net income fall and its gain in income excluding special charges also fell short of analysts' forecasts.
Internet search leader and tech bellwether Google (GOOG, Fortune 500) is due to release earnings after the market close; The Wall Street Journal reported that Yahoo (YHOO, Fortune 500) is closer to outsourcing its search advertising to Google.
Stocks surged Wednesday after chipmaker Intel and JP Morgan both posted results that came in above expectations.
Weekly jobless claims: The number of newly laid off workers filing claims for unemployment benefits rose more than expected last week, according to a report from the Labor Department.
The report said new claims for unemployment benefits increased to 372,000, an increase of 17,000 from the previous week.
Meanwhile, the four-week moving average for claims was 376,000, down only slightly from 376,750, the previous week.
Aside from the period in the fall of 2005 after Hurricane Katrina hit, the four-week average for claims has risen to levels last seen in 2003 when the country was mired in a long jobless recovery after the 2001 recession.
Economic readings due Thursday include reports at 10 a.m. ET on the index of leading economic indicators and the Philadelphia Fed's take on the state of manufacturing in its district.
After early gains that took them up from Wednesday's record close, oil prices retreated slightly, as the price of a barrel of light sweet crude slipped 17 cents to $114.76. The euro hit yet another record high versus the dollar although the U.S. currency posted a modest rebound versus the yen.
In global trade, Japan stocks rallied. Major markets in Europe also rose in early trading. 
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