Stocks set to tumble

By staff

NEW YORK( -- U.S. stocks were set to drop at Thursday's open, as jobless claims surged, worries about the debt crisis in Greece resurfaced and Federal Reserve chief Ben Bernanke prepared for a second day of testimony on Capitol Hill.

Dow Jones industrial average, S&P 500 futures and Nasdaq 100 futures were lower, dropping further after an unexpected gain in jobless claims.

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

Wall Street rallied Wednesday after Bernanke again vowed to keep interest rates low for the foreseeable future, reassuring worried investors. The blue-chip Dow gained nearly 100 points.

But the positive sentiment didn't last. Bruce McCain, chief investment strategist for Key Private Bank, said the "turmoil in Europe," highlighted by the fact that thousands of Greek workers went on strike on Wednesday, is prompting Wall Street to question its recent advances.

"Given the runup that we've had, people are backing up a bit and digesting what they're seeing in the economy and looking for greater clarity as to the direction we take from here," he said.

"Sometimes expectations leap ahead of the economic cycle," McCain continued. "People are concerned that markets have moved too fast. There is a general tendency for the markets to move back and adjust the gains, and it looks like we are in one of those periods."

Economy: The Labor Department released its weekly jobless claims report before the opening bell on Thursday.

Initial jobless claims surged to 496,000 in the week ended Feb. 20. That's much more than the 460,000 claims projected by a consensus of economist opinion from It's also much larger than the revised tally of 474,000 claims reported for the prior week.

Also, the Census Bureau released its monthly report on orders for durable goods, a barometer for manufacturing that rose much more than expected.

Orders for durable goods rose 3% in January, the government reported. The orders were expected to have risen 1.5%, according to consensus.

Fed: With employment still weak, investors were reassured that the Fed was unlikely to raise short-term interest rates anytime soon.

The Fed chief is scheduled to appear before a Senate panel Thursday, basically repeating the testimony he gave to the House panel.

Companies: Coca-Cola (KO, Fortune 500) has agreed to buy the North America operations of its biggest bottler, Coca-Cola Enterprises (CCE, Fortune 500), in a deal worth about $12 billion, including nearly $9 billion in assumed debt.

World markets: European shares edged lower in morning trading as investors refocused their attention on Greece's woes. Britain's FTSE 100, France's CAC 40 and the DAX in Germany all posted slim losses.

Asian markets finished the session in negative territory. The Nikkei in Japan tumbled nearly 1% and the Hang Seng in Hong Kong ended 0.3% lower.

Cash and bonds: The dollar rose against the euro and the pound but slipped versus the yen. The price of the 10-year note fell, pushing up the yield to 3.64%.

Gold and oil: The price of gold fell $4.50 per ounce to $1,092.70. The price of oil fell $1.42 a barrel to $78.58.  To top of page

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