NEW YORK (CNNfn) - Stock futures fell sharply in advance of Thursday's U.S. stock market open, signaling no initial follow through from a late comeback in the prior session -- although investors could be swayed later in the day by reassurances about the economy in the wake of last week's terrorist attack.|
At 8:45 a.m. ET, the Nasdaq-100 futures were down more than 2 percent, signaling an initial jolt to the Nasdaq Stock Market. The Standard & Poor's futures also tumbled, indicating a weak open for the S&P 500 and Dow Jones industrial average.
Wednesday's late-day comeback, with the Dow cutting its loss by about two-thirds, came in part because of short covering, which occurs when investors who bet stocks would fall further have to buy stock back to cover earlier loans. But the jitteriness that has pervaded Wall Street since trading resumed Tuesday continues.
Among the developments haunting investors are the deployment of military forces, presumably toward the area around Afghanistan, where suspected attack leader Osama bin Laden is believed to be hiding. On Thursday, Afghanistan's grand Islamic council rejected a U.S. demand that bin Laden be handed over for trial, but recommended that the ruling Taliban ask bin Laden to leave the country.
Concern about the airline industry, which is cutting tens of thousands of jobs, and profit warnings from major companies also are contributing to the funk.
Federal Reserve Chairman Alan Greenspan and President Bush will try to calm economic fears Thursday. Greenspan is scheduled to appear before the Senate Banking Committee Thursday morning. In a closed-door appearance before a House panel Wednesday, lawmakers said the chairman was clear about the need for reassurance.
And at 9 p.m. ET, well after the markets close, the president is scheduled to address a joint session of Congress. The speech, which will center on the U.S. response to the terrorist attack, is also expected to offer some positive words about the economy.
The Dow starts the day at 8,759.13, after dropping 144 points Wednesday. The Nasdaq composite index begins at 1,527.80 after a 27-point slide, while the Standard & Poor's 500 index is at 1,016.10, having lost more than 16 points.
Asian markets finished lower Thursday, as investors worried that U.S. consumers will rein in spending following the devastating attacks on New York and Washington. European stocks fell broadly in early trading.
Treasury prices were flat to lower in early trading, with the 10-year note yield rising to 4.70 percent from 4.69 percent late Wednesday. The dollar strengthened against the euro but weakened versus the yen. As war talk grows, Brent oil futures rose 35 cents to $26.67 a barrel.
The government said housing starts for August fell to an annual rate of 1.53 million units, well below the 1.63 million forecast of economists surveyed by Briefing.com and the revised 1.64 million rate in July.
The Labor Department said its weekly report on jobless claims didn't reflect the impact of last week's attacks. The number of claims fell by 49,000 to 387,000 for the week ended Sept. 15. Economists surveyed by Briefing.com predicted 420,000 new filings.
After trading begins, the Philadelphia Federal Reserve's report on regional economic activity in September is set for release. The index for the region, about 100 miles from the World Trade Center, is expected to improve to 14.6 from 23.5 in August.
ConAgra (CAG: Research, Estimates), the food processor, reported fiscal first-quarter earnings of 36 cents a share, up from 25 cents a year earlier and above the 28 cent a share consensus of analysts surveyed by the research firm First Call. ConAgra shares fell 7 cents to $22.50 Wednesday.
Companies slated to announce results after the closing bell include Nike (NKE: Research, Estimates) and handheld computer maker Palm (PALM: Research, Estimates). Nike is expected to report earnings of 71 cents a share, down from 77 cents a year earlier, while Palm is forecast to post a loss of 9 cents a share compared with a profit of 4 cents a share the prior year. Nike dropped 29 cents Wednesday to $42.75, while Palm gained 10 cents to $2.51.
Rayovac (ROV: Research, Estimates), the battery maker, warned Thursday that its fiscal fourth-quarter and 2002 earnings will be below expectations. The company's shares lost 35 cents to $16.25 Wednesday.