dow futures falling high jobless figures

U.S. Stock Futures Slide on Unexpected Jump in Jobless Claims

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By Lynn Thomasson

June 25 (Bloomberg) -- U.S. stock-index futures retreated after initial jobless claims unexpectedly increased, reviving concern that rising unemployment will prolong the recession.

Bank of America Corp. and ConocoPhillips declined more than 1 percent after first-time claims for benefits grew by 15,000 last week to 627,000. Nike Inc., the world’s biggest athletic- shoe maker, fell 4.4 percent after orders decreased 12 percent because of the global economic slump.

“It’s going to be a slow grind out of this,” Douglas Cliggott, the Greenwich, Connecticut-based manager of the $81 million Dover Long/Short Sector Fund, which beat 96 percent of its peers last year, told Bloomberg Radio. “The key for the next six to nine months is: ‘When are we going to start to see some earnings growth?’ It doesn’t look like it’s going to be this summer.”

Futures on the Standard & Poor’s 500 Index expiring in September slid 0.7 percent to 891.7 at 8:49 a.m. in New York after rising as much as 1.2 percent earlier. The index has lost 4.8 percent since June 12 after a 40 percent rebound from its March lows. Dow Jones Industrial Average futures lost 0.6 percent to 8,203 and Nasdaq-100 Index futures fell 0.7 percent to 1,437.5.

The jump in jobless claims reported by the Labor Department overshadowed another government report showing the economy shrank less than estimated in the first quarter. Gross domestic product contracted at a 5.5 percent annual rate in the first quarter, reflecting declines in inventories, housing and business spending that have since eased. Economists had forecast a decline of 5.7 percent, matching the government’s first estimate.

Most U.S. stocks advanced yesterday as durable goods orders unexpectedly jumped and earnings topped estimates at Oracle Corp. Equities pared gains and the Dow average fell as the Federal Reserve disappointed investors by not increasing its bond-purchase program.

Fed policy makers yesterday voted to maintain the size and pace of their $1.75 trillion program to buy mortgage debt and Treasuries. The central bank said it sees a “gradual resumption of sustainable” growth.

Bets against the S&P 500 rose for the first time since March as investors increased short sales of health-care stocks including Merck & Co. and Cardinal Health Inc. Short interest on the index climbed to 9.8 billion shares as of June 15, a gain of almost 1 percent from two weeks earlier, according to data compiled by U.S. exchanges and Bloomberg and released yesterday.

Nike dropped 4.4 percent to $50.68 in pre-market trading in New York. Excluding the effect of currency exchange rates, worldwide orders for delivery from June through November fell 5 percent from a year earlier. Sara Hasan, an analyst with McAdams Wright Ragen Inc. in Seattle, projected orders would decline 2 percent at most, on that basis.

To contact the reporter on this story: Lynn Thomasson in New York at [email protected].
Last Updated: June 25, 2009 08:51 EDT