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Jobless Claims Rise Cools Stock Futures

NEW YORK ( TheStreet) -- Stock futures were trimming gains Thursday on sobering U.S. labor market news that underscored the fragility of the economic recovery.

Futures for the S&P 500 were up 1.25 points, or 2.11 points above fair value, to 1,549.75. Futures for the Dow Jones Industrial Average were up 9 points, or 21.65 points above fair value, at 14,496. Futures for the Nasdaq were down by 0.5 points, or 1.39 points below fair value, at 2,786.5.

U.S. stocks fell the most in five weeks Wednesday as a convergence of sluggish job creation, slow service sector growth and international conflict sent crude tumbling along with energy stocks.

Sam Stovall, chief equity strategist at S&P Capital IQ in Manhattan, cautioned that the rise in stocks in preceding sessions to fresh highs does not necessarily point to all-around strength in the underlying sectors.

"The defensive sectors within the S&P 500 have been the group of choice for reluctant investors grudgingly reentering the equity market, who at the same time have been in search of yields to serve as bond substitutes," he noted in a Wednesday evening report.

"From a technical perspective, over the past couple of weeks, the stock market has weakened below the surface, which many times foretells trouble for the majors," he added.

The Labor Department reported that the number of Americans filing for unemployment benefits rose 28,000 to a four-month high of 385,000 in the week ended Mar. 30 from 357,000 in the prior week. Economists were expecting a dip to 350,000. The four-week moving average smoothing out week-to-week volatility to provide a more accurate longer-term picture meanwhile increased by 11,250.

The number of people continuing to collect jobless benefits however fell by 8,000 in the week ended Mar. 23.

Outplacement firm Challenger, Grey & Christmas said that planned corporate job cuts fell 11% in March, but that quarterly job cuts reached their highest level since 2011 led by retailers in March, and included sequester-related government job cuts.

The dollar was rising 0.73% to $83.323 according to the U.S. dollar index.

The benchmark 10-year Treasury was falling 3/32, bringing the yield up to 1.824%.

May crude oil futures were up a penny to $94.46 a barrel on the New York Mercantile Exchange. Gold for June delivery was plunging $10.30 to $1,543.20 an ounce, failing to benefit from any recent weaknesses in stocks.

The DAX in Germany was up 0.46% after the European Central Bank opted to keep its benchmark interest rates at record lows and ECB President Mario Draghi said policy will stay accommodative for as long as needed.

The Nikkei 225 in Japan finished ahead by 2.2% after the Bank of Japan announced aggressive monetary easing, increasing its Japanese government bond purchases to about 7 trillion yen each month from the current pace of approximately 4 trillion yen a month.

The FTSE 100 in London was off 0.33% after the Bank of England stood pat on key rates but refrained from injecting fresh stimulus into the economy.

The Hong Kong markets were closed for a public holiday.

Facebook (FB - Get Report) shares were up 1.5% to $26.64 in premarket trading on expectations that the world's largest social-media platform is poised to announce a new Android phone Thursday.

Compuware (CPWR) was falling 2.74% to $11.70 after the Detroit-based software company predicted Wednesday current quarter earnings of 5 cents to 6 cents a share and full-year earnings of 26 cents to 28 cents a share, both significantly missing Wall Street targets. The company said that its results will be deeply hurt from a large number of deals it had anticipated closing in the fourth quarter being pushed into the next fiscal year because many clients were unable to formalize their IT budgets.

Carnival Corporation (CCL - Get Report) shares were down 1.64% to $33.08 after the cruise line operator's 900-foot Carnival Triumph suffered more setbacks, torn from its mooring in a Mobile, Ala. shipyard Wednesday by strong winds. This is the same cruise that in February broke down in the Gulf of Mexico after a fire broke out and wiped out the ship's electric power, causing widespread malfunctions including that of the sewage system.

Google (GOOG - Get Report) will launch a new version of its Nexus 7 tablet powered by Qualcomm's (QCOM) Snapdragon processor around July, two sources told Reuters.

Google aims to ship as many as 8 million of the low-end tablets, the sources said.

Written by Andrea Tse in New York

>To contact the writer of this article, click here: Andrea Tse.

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