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Wall Street poised for losses at opening ahead of GDP, weekly claims reports

Wall Street poised for losses at opening ahead of GDP, weekly claims reports

Wall Street headed for a lower opening Thursday after a pair of reports showed that the U.S. economy nearly stalled in the final quarter of 2007 and unemployment claims rose last week.
Fourth-quarter gross domestic product rose by 0.6 percent, according to the Commerce Department, below a Thomson/IFR projection of 0.7 percent
For all of 2007, the economy grew at the weakest pace in five years, rising at 2.2 percent pace after a 2.9 percent gain in 2006. Though disappointing, investors were already well aware that the economy ended 2007 on a soft note.
Separately, the Labor Department said first-time unemployment claims last week increased 19,000 to 373,000, marking the highest level since late January. The less volatile four-week average of claims showed a decline.
The dollar dipped to a new low Thursday, when the 15-nation euro bought $1.5150 in early European trading.
The futures contract for the Dow Jones industrial average fell 83 points, or 0.6 percent, to 12,610. Futures contracts for the Standard & Poor's 500 index lost 10.10 points, or 0.7 percent, to 1,370. and the Nasdaq 100 gave up 6.2 points, or 0.3 percent, to 1,794.
Oil futures were on the rise, last trading up 43 cents at $100.07 a barrel, after breaking through $102 for the first time Wednesday. Treasurys rose, pushing yields lower. The benchmark 10-year note's yield dropped to 3.80 percent from 3.85 percent.
The stock market this week has been barraged by a series of complex developments, including regulatory changes that should enable mortgage companies Fannie Mae and Freddie Mac to put badly needed liquidity into a famished housing sector. There were also indications that funding may be found for ailing bond insurers.
Throughout the week the market has responded in a generally favorable way, allowing the Dow to post gains every day so far. Some investors even are hoping that on Friday the major indexes will manage to end February with gains, which would be a marked contrast to January's bloodletting.
Much will depend on whether hopeful or discouraging signs for the housing and bond insurance crises emerge on the two final trading sessions of the month.
The latest earnings reports underscored current economic challenges. Mortgage company Freddie Mac reported a quarterly loss of $2.5 billion (euro1.65 billion). The result was wider than its year-earlier loss and steeper Wall Street had expected. Freddie Mac forecast further weakness in the housing market.
Sears Holdings Corp. warned early Thursday that profits will be squeezed by declining economic conditions as it posted a 47 percent decline in the final quarter of 2007.


Updated : 2020-11-30 10:51 GMT+08:00