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Bearish reminders
N.Y. explosions cause no injuries, but higher oil, terror worries could hit stocks in early trading.
May 5, 2005: 7:28 AM EDT

NEW YORK (CNN/Money) - Stocks were looking at a difficult open Thursday amid two small explosions in New York and higher oil prices.

Police reported no one injured by the small blasts in front of the British consulate at 3:35 a.m. ET, but the early reports sent U.S. stock futures down. While the futures came part of the way back after the lack of injuries was reported, they were still lower than fair value, indicating a lower opening for stocks.

The explosions came the day of parliamentary elections in Britain that are expected to result in a third term for the Labor government of Prime Minister Tony Blair.

Nick Stryganeck, chief market strategist for LaSalle Futures in Chicago, said that even though the explosions appear to be a minor event, it's enough to get the attention of traders.

"It's been quite a while like we've had anything happen in this country. So it's obviously going to make people very skittish until the authorities figure out what happen," he said. He said that without other news to focus on, many traders will be cautious ahead of the April employment report due before the market open Friday.

Economists surveyed by forecast that the report will show 175,000 jobs added to payrolls in April, up from a 110,000-job gain in March. The unemployment report is forecast to remain at 5.2 percent.

Oil remained higher after the blast, following arally Wednesday that took prices firmly above the $50 a barrel mark.

The June light crude contract gained 54 cents to $50.67 a barrel in electronic trading, while the June contract for Brent crude rose 62 cents to $51.59.

Major markets in Asia closed higher Thursday, although markets in Japan and China were shut for holidays. Major European markets were higher in early trading, although they lost some of the earlier gains following the blast reports from New York.

Treasury prices dipped, raising the yield on the 10-year note to 4.20 percent from 4.18 percent late Wednesday. The dollar was down slightly against the euro and the yen.

Economic reports due Thursday include the weekly report on jobless claims.

Economists surveyed by forecast that there were 324,000 people filing for initial jobless claims last week, up from 320,000 the week earlier.

A report on first quarter productivity is forecast to show a 1.8 percent gain, down from a 2.1 percent gain in the fourth quarter.

In corporate news, Wal-Mart Stores (Research) reported a 0.9 percent gain in sales at U.S. stores open at least a year.Analysts surveyed by First Call had been looking for a 1.0 percent gain in sales at that company.

IBM (Research) announced after the market close Wednesday that it planned to cut up to 4 percent of its staff, with most of the 13,000 job cuts coming in Europe. Shares of IBM gained more than 1 percent in after-hours trading following the announcement.

Another tech bellwether, chipmaker Intel, meets with analysts Thursday. The meeting gets underway in New York at 1 p.m. ET.

For a more detailed look at the markets before the open, click here.  Top of page


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