US STOCKS-Futures decline ahead of CPI, initial claims data

Thu Feb 21, 2013 1:12pm GMT

Quotes

   

* CPI, initial jobless claims data due

* Wal-Mart shares edge up after earnings

* Futures off: Dow 34 pts, S&P 4.3 pts, Nasdaq 12.5 pts

By Chuck Mikolajczak

NEW YORK, Feb 21 (Reuters) - U.S. stock index futures fell on Thursday, indicating the S&P 500 would extend declines after its biggest percentage drop in three months a day earlier, ahead of data on the labor and housing markets.

A flurry of economic data is due, which investors will peruse for signs of economic progress, including weekly initial jobless claims at 8:30 a.m. ET (1330 GMT). Economists in a Reuters survey forecast a total of 355,000 new filings compared with 341,000 in the prior week.

The January consumer price index is also due at 8:30 a.m., with estimates calling for a 0.1 percent increase compared with an unchanged reading in December. Excluding volatile food and energy items, CPI is expected to have risen 0.2 percent compared with a 0.1 percent increase in the previous month.

The benchmark S&P index dropped 1.2 percent on Wednesday, its biggest decline since Nov. 14, after minutes from the U.S. Federal Reserve's most recent meeting suggested the central bank may slow or stop buying bonds sooner than expected.

The Fed has used quantitative easing, or QE, since 2008 in a bid to stimulate the economy. The policy, which involves expanding the Fed's balance sheet to buy bonds, has been credited with pushing money into the stock market, and its withdrawal would remove a ballast for the markets.

"The fundamentals, while they are not terrible and they are not degrading, they haven't exactly been worth paying up for these stocks - just the promise of QE drove them. And it's going to work the other way, the promise of QE stopping might do the inverse," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"What the Fed is really trying to do is to make sure the data we are looking for today - real economic data - can take the place of the manufactured economic data, which is the Fed buying."

At 8:58 a.m. (1358 GMT), information services company Markit releases U.S. flash Markit Manufacturing PMI for February. Economists in a Reuters survey forecast a reading of 55.5 compared with 55.8 in the final January release.

Wal-Mart Stores Inc edged up 0.4 percent to $69.50 in premarket trading after the world's largest retailer reported a larger-than-expected rise in quarterly profit and raised its dividend payout.

S&P 500 futures fell 4.3 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 lost 34 points, and Nasdaq 100 futures dropped 12.5 points.

VeriFone Systems Inc tumbled 36.8 percent to $20.16 in premarket trading after the credit card swipe-machine maker forecast first and second-quarter profit that were well below analysts' expectations.

Berry Petroleum Co jumped 14 percent to $44 in premarket trading after oil and gas producer Linn Energy LLC said it would buy the company in an all-stock deal valued at $4.3 billion including debt.

Later in the session at 10:00 a.m. (1500 GMT), the National Association of Realtors releases existing home sales for January. Estimates forecast a 4.90 million annualized unit total in January versus 4.94 million annualized units in December.

Also at 10:00 a.m., the Conference Board releases its report on January leading economic indicators. Economists in a Reuters survey forecast a 0.3 percent rise compared with a 0.5 percent increase in December.

According to Thomson Reuters data through Wednesday morning, of the 405 companies in the S&P 500 that have reported results, 71 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.7 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.