Wall St Set For Lower Open On Economic Woes

The earnings season continues to be weak with more companies warning about the year to come.

Wall Street was set for a lower open on Thursday due to concerns over a weak earnings season while economic data showed further deterioration in the labor and housing markets gripped by the year-long recession.

The number of workers filing new claims for jobless benefits rose by more than expected last week, while housing starts and permits fell to a record low in December, data showed. For details, see [ID:nN22525475] [ID:nN21489514].

But the Nasdaq could see some support from Apple <AAPL.O>, which announced quarterly profit that surpassed Wall Street's expectations after the closing bell on Wednesday. Shares of the iPod maker were up 8.1 percent at $89.50 in premarket trading.

Despite some bright spots such as Apple and International Business Machines Corp <IBM.N>, the earnings season continues to be weak with more companies warning about the year to come.

Among the morning's fresh batch of quarterly results, world No. 1 defense contractor Lockheed Martin Corp <LMT.N> posted a better-than-expected rise in profit but sharply cut its full-year forecast, sending its stock down 2.5 percent at $78. [ID:nN22520118].

"The market knows it's not going to be a good earnings season," said Peter Cardillo, chief market economist at Avalon Partners in New York.

"We've had one or two surprises, but basically so far the earnings have been in line with negative expectations."

S&P 500 futures <SPc1> fell 6.70 points and were 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 <DJc1> were down 70 points and Nasdaq 100 <NDc1> futures were off 0.75 points.

Stocks had risen on Wednesday, rebounding from a two-month low, after a surprisingly strong earnings report from IBM fueled optimism that technology may fare better than other sectors during the recession.

Technology shares are likely to stay in focus on Thursday with quarterly earnings expected from Microsoft <MSFT.O> and Google <GOOG.O> after the closing bell.

Overseas, top cellphone maker Nokia <NOK1V.HE> added to worries over the impact of the economic slowdown on consumer spending, warning market volumes would shrink 10 percent this year. [ID:nLL462427].

Investors will also be watching for a vote by the U.S. Senate Finance Committee on the nomination of Timothy Geithner to be Treasury secretary expected later in the day.

Geithner faced tough questioning at his confirmation hearing before the committee on Wednesday. Wall Street had originally cheered Geithner's nomination but the choice has since come under controversy over Geithner's failure to pay some taxes.

"Geithner is expected to be approved as the Treasury secretary and I think that will give the market a lift," said Cardillo.