U.S. stocks head for another down day
NEW YORK -- Stocks were poised to open lower Thursday as investors, already concerned about technology spending after the Internet networking supplier Cisco Systems' dreary outlook, reacted to sales reports from the nation's major retailers.
Late Wednesday, Cisco Systems Inc. reported quarterly results that met analysts' expectations but issued a 10 percent sales growth forecast for its current quarter that was well below the 15 percent that Wall Street had projected. Cisco shares sank nearly 9 percent in premarket trading.
Then early Thursday, Wal-Mart Stores Inc. reported a 0.5 percent rise in January same-store sales, or sales at stores open for at least a year. The disappointing news, which sent Wal-Mart shares down more than 3 percent in premarket trading, followed a bleak Wednesday report from Macy's Inc. that the department store's same-store sales fell by 7.1 percent.
Investors are not only uneasy about weakening retail spending, but also the housing and jobs market. Wall Street will be paying close attention to Thursday's data on pending sales of existing homes, weekly jobless claims and consumer credit.
Another stock drop on Thursday would bring the market its fourth straight down day. The Dow Jones industrial average has lost 543 points, or 4.26 percent, so far this week on a toxic mix of concerns including a contraction in the service sector and a weakening consumer.
Dow futures fell 63, or 0.51 percent, to 12,172. Standard & Poor's 500 index futures fell 8.80, or 0.66 percent, to 1,321.20, and Nasdaq 100 index futures, reflecting the concerns about tech stocks, fell 26.50, or 1.52 percent, to 1,721.75.
The dollar was mixed against other major currencies, while gold prices slipped.
Light, sweet crude oil fell 28 cents at $86.86 a barrel in premarket trading on the New York Mercantile Exchange.
Oil prices appear to be on a gradual decline, so it's possible that a slower economy is keeping inflation from accelerating; still, many market participants are anxious about how much longer the Federal Reserve can continue to lower interest rates given relatively high food and energy costs.
In earnings news, soft drink and snack maker PepsiCo Inc. said its fourth-quarter profit dropped 30 percent from results a year ago, which included a tax benefit.
Aetna Inc. posted a 3 percent rise in fourth-quarter profit thanks to membership growth, cost cuts and increases in premium and fee rates.
Overseas, many Asian markets were closed for a holiday, but Japan's stock market was open and its Nikkei average rose 0.82 percent. In Europe, Britain's FTSE 100 rose 0.09 percent, Germany's DAX index fell 1.29 percent, and France's CAC-40 fell 1.06 percent.
On Thursday, the Bank of England lowered its key interest rate by a quarter percentage point to 5.25 percent, its second cut in three months, while the European Central Bank left its key rate unchanged at 4 percent.