Stock futures lower after overseas markets drop; ahead of jobs, factory orders reports

Stock futures off following overseas markets’ lead

NEW YORK — Stock futures are pointing to a lower opening Thursday, following declines in overseas markets.

Investors are hesitant to make big bets as they await new reports on jobless claims, factory orders and monthly retail sales for better insight into the economic recovery.

Stocks rallied early this week on fresh signs surging economic growth at the end of last year was carrying forward into 2010. However, markets fell modestly Wednesday after a report showed the service sector did not expand as fast as expected last month.

European markets tumbled Thursday as concerns swirl around debt-plagued countries, particularly in Greece, Spain and Portugal. The fresh concerns come as the European Central Bank is expected to keep a key interest rate at 1 percent.

The euro hit a seven-month low against the dollar. A stronger dollar can drag down stocks in the U.S. because it hurts companies that have large international operations.

Ahead of the opening bell, Dow Jones industrial average futures fell 44, or 0.4 percent, to 10,197. Standard & Poor’s 500 index futures fell 5.20, or 0.5 percent, to 1,091.20, while Nasdaq 100 index futures dropped 9.50, or 0.5 percent, to 1,776.00.

A Labor Department report is expected to show the number of workers filing for unemployment benefits fell last week by 10,000 to a seasonally adjusted 460,000, according to economists surveyed by Thomson Reuters.

The report is due out at 8:30 a.m. EST.

The weekly claims report comes a day ahead of the monthly employment report that often sets the tone for trading in the following weeks. High unemployment is a major obstacle to a robust economic recovery.

Friday’s report is expected to show employees added 5,000 jobs in January, but the unemployment rate crept higher to 10.1 percent. December’s rate was 10 percent.

A separate report Thursday from the Commerce Department is expected to show factory orders likely rose for a fourth consecutive month in December. Economists predict orders increased 0.5 percent.

The report is due out at 10 a.m. EST.

Earnings continued to provide a mixed picture of the economy. Cigarette maker Reynolds American said its profit fell as shipments declined. Its fourth-quarter profit just missed expectations.

Cosmetics maker Avon Products Inc. saw a drop in North American sales more than offset by international sales.

Burger King Corp.’s profit topped expectations as it brought in more cost-concious eaters.

Stocks are trying to bounce back from a modest decline Wednesday. Major indexes halted a two-day rally after the Institute for Supply Management said its index of the service sector rose to 50.5 in January. While a reading above 50 indicates growth, the January level fell short of what economists had forecast.

Meanwhile, bond prices rose Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.69 percent from 3.71 percent late Wednesday.

The dollar strengthened against other major currencies, while gold prices fell.

Overseas, Britain’s FTSE 100 fell 0.7 percent, Germany’s DAX index was dropped 0.6 percent, and France’s CAC-40 fell 0.7 percent. Japan’s Nikkei stock average fell 0.5 percent.