Stocks head for lower open on Wal-Mart sales

August 7, 2008 9:03:13 AM PDT
Wall Street headed for a lower open Thursday after Wal-Mart Stores reported disappointing same-store sales, raising more concerns about a slowdown in consumer spending. The world's largest retailer said same-store sales, or stores open at least one year, rose 3 percent in July as consumers used up their government stimulus checks. Wall Street had expected on average a 3.4 percent rise.

The results added to the market's worries that a souring U.S. economy and rising unemployment are hurting consumer spending, which accounts for two-thirds of the U.S. economy.

In premarket trading, the Dow Jones industrial average futures fell 66, or 0.57 percent, to 11,565.

The Standard & Poor's 500 index futures was down 5.40, or 0.42 percent, at 1,282.30, and the Nasdaq 100 index futures was down 5.25, or 0.28 percent, at 1,891.

Investors are also awaiting a government reading on unemployment. Economists expect new filings for unemployment insurance to hit 430,000 for the week ending Aug 2. The report is due at 8:30 a.m. EDT.

In recent weeks, General Motors Corp., Weyerhaeuser Co., and Starbucks Corp. have all announced job cuts, sending more people to the unemployment lines.

The market is also waiting for a report on consumer credit. The Federal Reserve is expected to report that consumers borrowed less freely in June as the deepening economic slowdown pinched spending.

The amount of debt rung up by consumers is expected to increase by $6.4 billion in June compared to the previous month. That would be down from the $7.8 billion month-over-month increase seen in May.

Oil prices that fell sharply earlier in the week rebounded Thursday. Light, sweet crude rose $2.03 to $120.61 in premarket electronic trading on the New York Mercantile Exchange.

Bonds fell early Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its prices, rose to 4.06 percent from 4.05 percent late Wednesday. The dollar was lower against other major currencies, while gold prices rose.

Overseas, Japan's Nikkei stock average fell 0.98 percent. In afternoon trading, Britain's FTSE 100 was up 0.52 percent, Germany's DAX index was up 0.76 percent, and France's CAC-40 was up 1.20 percent.


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