US STOCKS-Wall St to dip at open after data, Wal-Mart results

Source : REUTERS
Last Updated: Thu, May 16, 2013 13:20 hrs

* Cisco jumps after earnings, outlook

* Wal-Mart slips after earnings miss

* Jobless claims climb, housing starts drop

* Futures: Dow off 8 pts, S&P off 2.1 pts, Nasdaq up 4 pts

By Chuck Mikolajczak

NEW YORK, May 16 (Reuters) - U.S. stocks were poised for a slightly lower open on Thursday, indicating the Dow and S&P 500 may ease from their most recent record highs after softer-than-expected data on the housing and labor markets.

Labor Department data showed weekly initial jobless claims jumped by 32,000 to a seasonally adjusted 360,000, the biggest jump since November and above expectations for claims of 330,000.

In addition, housing starts fell 16.5 percent last month to a 853,000-unit annual rate, below analysts' expectations of a 945,000-unit rate, although applications to build new homes rose 14.3 percent from a month earlier to an annual rate of 1.017 million.

But the Consumer Price Index slipped 0.4 percent, the biggest decline since December 2008, versus expectations calling for a 0.2 percent decline, indicating inflation pressure remains tame and giving the U.S. Federal Reserve the latitude to maintain its current monetary policy.

Data showing a modestly growing economy has increased investor confidence the Federal Reserve will keep stimulus measures in place, helping push yearly gains for both the Dow and S&P 500 indexes to more than 16 percent.

"Everyone is waiting for some sort of pullback and we haven't had one in a very long time, when the momentum is stronger we don't see a larger pullback that people are expecting," said Amy Magnotta, Portfolio Manager and Senior Investment Analyst at Brinker Capital in Berwyn, Pennsylvania.

"Even when we have gotten worse data, the market has turned around, so today could go either way."

Wal-Mart Stores Inc, the world's largest retailer and a barometer of consumer spending, fell 2 percent to $78.28 in premarket trade after posting a quarterly profit that missed Wall Street expectations, with sales down 1.4 percent at U.S. stores open at least a year.

But Cisco Systems Inc climbed 12.3 percent to $23.86 in premarket trade, may boost indexes after the network equipment maker posted a higher-than-expected quarterly profit and said current-quarter revenue could increase.

S&P 500 futures lost 2.1 and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dipped 8 points, and Nasdaq 100 futures added 4 points.

Later in the session at 10 a.m. (1400 GMT), the Philadelphia Federal Reserve Bank releases its April business activity survey. Economists in a Reuters survey forecast an April reading in the main index of 2.4 versus 1.3 in March.

A weaker-than-expected reading for New York state's manufacturing sector on Wednesday failed to dent the bullish sentiment among investors.

Tesla Motors Inc surged 10.7 percent to $93.90 in premarket trade after the electric carmaker said it aims to raise $830 million through a stock and debt offering that will be used to repay its U.S. Department of Energy loans with interest. The stock has surged more than 50 percent since posting earnings last week.

Berkshire Hathaway B-class shares slipped 0.2 percent to $112.59 before the opening bell after Standard & Poor's downgraded the company's counterparty rating to "AA" from "AA+" with a negative outlook.

Advanced Micro Devices Inc slumped 7.1 percent to $4.07 in premarket after Goldman Sachs cut its rating on the stock to "sell."




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