AP
Stock futures lower as investors watch earnings
Thursday October 23, 7:46 am ET
By Stevenson Jacobs, AP Business Writer
Wall Street heads for lower open as investors await jobs report, watch earnings


NEW YORK (AP) -- Wall Street headed for a lower open Thursday as investors awaited a government reading on unemployment and sifted through a batch of bleak corporate earnings that has stirred intense anxiety about the health of the global economy.
ADVERTISEMENT


Investors remained anxious following two days of steep losses fed by fears that an economic slowdown is spreading around the globe. Analysts say volatile trading will continue for some time as investors seek to determine whether stocks have bottomed out and try to gauge the severity of a recession that many believe is already here.

Investors have been somewhat heartened by signs of slow improvement in world credit markets, but murky corporate forecasts, a jump in the dollar and falling commodity prices have fed more unease about the economic bumps that may lie ahead.

Hotel and leisure company Starwood Hotels & Resorts Worldwide Inc. said its third-quarter profit fell 12 percent and warned that 2009 will likely include softening worldwide in revenue-per-available-room and continued weakness in its vacation ownership division. It also expects a "significant" pullback on capital expenditures for owned hotels and the vacation ownership business.

In other earnings, Drugmaker Eli Lilly and Co. said it took a loss in the third quarter on a charge of almost $1.5 billion for an expected settlement of an investigation into the marketing of its top-selling drug, Zyprexa, while Dow Chemical Co. said quarterly profit rose 6 percent, helped by price hikes that offset a nearly 50 percent increase in raw materials and energy costs.

Investors will also be watching government data on jobs. The Labor Department report is expected to show that new claims for unemployment benefits rose slightly last week from already elevated levels -- indicating that the labor market remains weak as companies lay off workers and cut back on hiring. The report is scheduled to be released Thursday at 8:30 a.m. EDT.

Ahead of the market's open, Dow Jones industrial average futures fell 48, or 0.56 percent, to 8,509. On Wednesday, the Dow fell 514 points as investors worried that the global economy is poised to weaken even as parts of the credit market slowly show signs of recovery. That was on top of a 231-point loss Tuesday.

The Standard & Poor's 500 index futures fell 6.70, or 0.74 percent, to 896.10, and the Nasdaq 100 index futures fell 8.00, or 0.64 percent, to 1,240.00.

Earlier, indexes had pointed to a mixed open.

Meanwhile, credit markets continued to slowly show signs of improvement. Demand for short-term Treasury bills, regarded as the safest assets around, held steady with the previous day as economic worries led investors to shun risky assets in favor of government bonds.

The three-month Treasury bill yielded 1.01 percent, unchanged from late Wednesday. The levels are a notable improvement from the 0.20 percent seen last week, when investors were willing to trade the slimmest of returns for a safe place to keep their money.

The dollar was lower against the euro and British pound, while gold prices fell.

Light, sweet crude rose 77 cents to $67.52 premarket electronic trading on the New York Mercantile Exchange. The contract on Wednesday fell to a new 16-month low Wednesday as big increases in U.S. crude and gasoline stocks fed beliefs that the economic downturn is drying up demand for energy.

Overseas, Japan's Nikkei stock average fell 2.46 percent. Britain's FTSE 100 was up 0.65 percent, Germany's DAX index was down 0.33 percent, and France's CAC-40 was up 0.01 percent.

48 8509