futures point to weak start

MARKET SNAPSHOT

Futures point to a weak start
Productivity report disappoints; Jan. retail sales strong

By Mark Cotton, MarketWatch
Last Update: 9:08 AM ET Feb. 2, 2006
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NEW YORK (MarketWatch) -- U.S. stock futures are pointing to a lower open Thursday as disappointing data on labor productivity and weak earnings out of Tyco International offset strong January sales results from retailers.



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Dow futures were down 36 points at 10,949. Nasdaq 100 futures fell 7.5 points to 1,716 and S&P 500 futures dropped 4.5 points to 1,282.80.

"Earnings have been lackluster, guidance has been disappointing and the economic news we've just had, has raised inflationary fears," said James Park, director of institutional trading at Rodman & Renshaw.

On Wednesday, stocks closed higher as investors cheered strong results and an increased profit outlook from Boeing Co., with a steep decline in energy prices adding to the momentum. The upbeat tone late in the day helped temper the negative impact of an earnings miss out of Google Inc.

The Dow Jones Industrial Average ($INDU:
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Last: 10,953.95+89.09+0.82%

4:30pm 02/01/2006
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$INDU10,953.95, +89.09, +0.8%) rose 89 points to 10,953.

The Nasdaq Composite Index ($COMPQ:
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Last: 2,310.56+4.74+0.21%

12:19am 02/02/2006
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$COMPQ2,310.56, +4.74, +0.2%) was up 4 points at 2,310 while the S&P 500 Index ($SPX: S&P 500 Index
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Last: 1,282.46+2.38+0.19%

1:03am 02/02/2006
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$SPX1,282.46, +2.38, +0.2%) climbed 2 points to 1,282.

A weak productivity report stoked concern about rising inflationary pressures in the economy, and raised fears the Federal Reserve will have to continue lifting interest rates to keep inflation at bay.

Productivity of the American workplace fell at an annualized rate of 0.6% in the fourth quarter, the first decline since the first quarter of 2001, the Labor Department estimated.

Unit labor costs, a key measure of inflationary pressures, rose 3.5% annualized, the most in a year.

On a more positive note, first-time seasonally adjusted claims for state unemployment benefits fell by 11,000 to 273,000 in the week ending January 28, the Labor Department said. See full story.