3 Min Read
* Cisco slides after disappointing forecast
* Initial jobless claims jump
* S&P 500 futures off 7.60 points, Dow futures off 70 points, Nasdaq futures off 18 points
* For up-to-the-minute market news, click [STXNEWS/US] (Adds details, recasts)
By Leah Schnurr
NEW YORK, Feb 5 (Reuters) - Wall Street was poised for a lower open on Thursday as a jump in new claims for unemployment benefits to a 26-year high signaled a deteriorating economy, while grim corporate earnings and outlooks also dragged.
Government data showed the number of U.S. workers filing initial jobless claims jumped last week, a day before Friday's key January U.S. nonfarm payrolls report. For details see [ID:nN05420872].
"Not good," said Frank Lesh, futures analyst and broker at FuturePath Trading LLC in Chicago of the claims numbers.
"There's some selling in the markets on it. I think this is a precursor for tomorrow, and maybe tomorrow's numbers will be pushed up after people see this."
Cisco Systems Inc (CSCO.O), which makes infrastructure for the Internet, could weigh on the Nasdaq after it forecast a slide of up to 20 percent in current quarter revenue. [ID:nN03526527] Shares of the tech bellwether slid 4.2 percent to $15.17 before the opening bell.
S&P 500 futures SPc1 fell 7.60 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 lost 18.00 points.
Stocks fell on Wednesday as a gloomy profit forecast from Kraft Foods KFT.N fueled worries of weakening consumer spending while investors feared that government efforts to rescue banks could wipe out their shareholders.
Unease about the deteriorating earnings picture and uncertainty about the banking sector are major hurdles in the market's bid to recover from an 11-year low hit on Nov. 21. The S&P 500 is up 4 percent since then, but is down about 8 percent since the start of 2009.
State Street (STT.N) slashed its dividend and forecast 2009 operating earnings per share could fall as much as 16 percent. The financial services company's shares edged up 0.5 percent at $24.25 after initially falling in premarket trade.
The financial sector has also been pressured by worries about what shape a government plan to relieve banks of money-losing assets could ultimately take. The Obama administration is due to make an announcement next week.
Discount retailer Wal-Mart Stores (WMT.N) bucked the trend of lower January sales with numbers that surpassed expectations, sending its shares up almost 2 percent at $47.32. Wall-Mart, the world's biggest retailer, said it would now provide sales forecasts four times a year instead of monthly. [ID:nN05352669]. (Editing by James Dalgleish)