NEW YORK, May 8 - Stocks are set to drop at Thursday's open as investors curb their enthusiasm over the corporate and economic outlook after hoisting the broad S&P 500 index 16 percent higher since mid-March. Data showing an economy having trouble supporting new jobs nudged equity futures lower. Although first-time claims for state jobless benefits fell, the four-week moving average of claims -- a more accurate indicator of the job market's health because it smooths out volatility in the weekly data -- rose to its highest in more than a year. First-time claims fell 28,000 to 425,000 in the week ended May 3, below economists' average forecast for 438,000. But the moving average rose 3,250 to 446,000 in the May 3 week and to its highest since April 2002.
Equity futures pointed to a lower open. Standard & Poor's 500 stock index futures for June lost 6.50 points to 922.90. Nasdaq futures for the month were down 12 points at 1,127.50. Dow Jones Industrial futures fell 68 points to 8,480. The Nasdaq 100 pre-market indicator fell 0.79 percent. "The market had already been sharply lower before the jobless claims," said Harry Michas, a stock index futures trader at manmarketmonitor.com. "The market is generally a bit tired after the postwar rally. It's quite a bit overextended on the upside and needs to retrace to alleviate that condition." On Wednesday, stocks slipped as investors cashed in gains. Stocks had shot up on hopes for stronger growth in the economy later in 2003, but some investors are worried that the market has moved too far, too fast. A string of economic reports has pointed to a lackluster recovery.
Top U.S. retailers on Thursday reported that April same-store sales were anemic, prompting a few companies to trim earnings forecasts after a chilly month that failed to live up to its Easter sales promise. Wal-Mart Stores Inc. , the world's biggest retailer, said Thursday it expects a 1 percent to 3 percent increase in May sales at stores open at least a year. The retailer said on Wednesday its April same-store sales rose just 4.6 percent, missing its forecast for a 5 percent to 7 percent gain.//