Lackluster open seen for stocks

By CNNMoney.com staff


NEW YORK(CNNMoney.com) -- U.S. stocks were set for a lower open Thursday, as investors continued to worry about the job market and China, drawing little comfort from Wall Street giant Goldman Sachs and its better-than-expected record earnings.

Dow Jones industrial average, S&P 500 and Nasdaq-100 futures were lower, losing their momentum following a jobless claims report showing more people filing for unemployment benefits than expected.

Will you be looking for a new job this year?
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  • Yes, I'm unemployed.
  • No, I'm happy where I am.

Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.

Stocks on Wall Street slumped Wednesday, knocked back by concerns about China's efforts to tighten bank lending. The major indexes all lost at least 1%.

Mark Luschini, chief investment strategist for Janney Montgomery Scott, said futures were being dragged down partly by "spillover" from Wednesday's declines, and partly because of concerns over China, a global market driver and a major consumer of commodities.

"China is looking to put various curbs on bank lending activities, over concerns that perhaps their economy is getting a bit overheated," he said.

Earnings: Goldman Sachs (GS, Fortune 500) reported earnings that were much better than expected, attributed a dramatic scaleback of compensation. The finance company reported earnings of $8.20 per share for the fourth quarter. Analysts had expected $5.20 EPS, according to Thomson Reuters consensus.

Luschini said, prior to the report, that Goldman is not dependent upon consumer weakness, unlike JPMorgan Chase (JPM, Fortune 500) and Citigroup (C, Fortune 500), which both have credit card portfolios.

After U.S. markets closed Wednesday, Starbucks (SBUX, Fortune 500) posted upbeat results that topped Wall Street's estimates.

Economy: In its weekly report on jobless claims, the government reported that claims jumped to 482,000 in the week ended Jan. 16. That's higher than the prior week's revised total of 446,000.

Initial jobless claims were expected to have totaled 440,000, according to a consensus of economists from Briefing.com.

The Philadelphia Fed, a reading on regional manufacturing, is due out at 10 a.m. ET, as is a report on leading economic indicators.

World markets: Stocks in Asia finished mixed. Shares in Hong Kong pulled back but Japan's Nikkei added 1%. Stocks in Europe mostly rose in midday trading.

Oil and gold: The price of oil rose 23 cents to $77.97 per barrel. The price of gold dropped $5.40 per ounce to $1,107.20.

Cash and bonds: The dollar rose against major international currencies, including the euro, the yen and the British pound. The price of the 10-year note slipped, pushing the yield up to 3.65%. To top of page

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