Stock Futures Fall as Jobless Claims Climb


NEW YORK (TheStreet) -- Stock futures were falling Thursday after the Labor Department reported a rise in weekly initial jobless claims and investors eyed a summit of European Union leaders in Brussels with caution.

In China, third-quarter gross domestic product rose 7.4% from a year ago, which was as expected by economists surveyed by Reuters. Industrial production and retail sales data for September came in a bit above expectations.

Futures for the Dow Jones Industrial Average were down 8 points, or 9 points below fair value, at 13,481. Futures for the S&P 500 were down 3.89 points, or 2.55 points below fair value, at 1453. Futures for the Nasdaq were down 9.50 points, or 8.22 points below fair value, at 2761.

The Labor Department said initial jobless claims for the week ended Oct. 13 rose by 46,000 to 388,000 from the previous week's upwardly revised figure of 342,000. The four-week moving average was 365,500, an increase from the prior week's 364,750.

Continuing claims for the week ended Oct. 6 fell 29,000 to 3.252 million from the preceding week's upwardly revised level of 3.281 million.

On average, economists were expecting initial jobless claims of 365,000 and continuing claims of 3.275 million.

"After all the confusion between a high current reading and last week's barely revised low level of initial claims the key four-week moving average now stands at 365,500 and we continue to believe that despite the higher than forecast reading the broad labor market is maintaining its forward momentum," said Andrew Wilkinson, chief economic strategist at Miller Tabak. "Going forward and using the benchmark four-weekly average, we would say that initial claims will trend towards last week's lower number rather than this week's higher headline level."

The Philly Fed's Business Outlook Survey will be released at 10 a.m. EDT, and is expected to improve to 1 for October from -1.9.

At the same time, the Conference Board's Leading Economic Indicators Index is expected to show a rise of 0.2% in September after falling 0.1% in August.

The major U.S. equity averages overcame weakness in the tech sector to close in positive territory Wednesday as strength in housing starts prompted a rally in basic materials stocks.

The FTSE 100 in London was down 0.18% and the DAX in Germany was up 0.32% in trading Thursday.

The Nikkei Average in Tokyo closed up by 2% and the Hang Seng index in Hong Kong gained 0.48%.

November crude oil futures were down 6 cents at $92.06 a barrel. December gold futures were falling $4.70 at $1,748.30 an ounce.

The benchmark 10-year Treasury was rising 7/32, diluting the yield to 1.799%. The dollar was up 0.08%, according to the dollar index.

In corporate news, Morgan Stanley ( MS) beat estimates for the third quarter, helped by higher fixed income trading revenue.

Insurance and financial services giant Travelers Cos. ( TRV) posted a record quarterly operating profit of $2.22 a share, blowing past the average analyst estimate of $1.61 a share, driven by lower catastrophe losses and higher underlying underwriting results.

Google ( GOOG), the Internet search giant, is slated to report its third-quarter results after the closing bell Thursday, and the average estimate of analysts calls for a profit of $10.65 a share on revenue of $11.86 billion.

Dow component Verizon ( VZ) posted quarterly profit of $1.59 billion, or 56 cents a share, compared with $1.37 billion, or 49 cents a share a year earlier.

Revenue came in at $29 billion, up from $27.91 billion last year.

Excluding items, Verizon posted earnings of 64 cents a share.

Analysts were calling for earnings of 64 cents a share in the September-ended period on revenue of $29 billion.

Microsoft ( MSFT) is issuing its quarterly report after the close and analysts are looking for fiscal first-quarter profit of 56 cents a share on revenue of $16.42 billion from the software giant.

EBay ( EBAY), the online auctioneer, missed on the top line in its latest quarter and gave a fourth-quarter outlook Wednesday that includes a fair amount of downside to the consensus.

Mellanox Technologies ( MLNX) gave weak revenue guidance on Wednesday, saying it expects revenue between $145 and $150 million, well below the consensus estimate of $157 million.


--Written by Andrea Tse in New York.

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

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