NEW YORK, Feb 15 (Reuters) - U.S. stocks were headed for a sharp...

NEW YORK, Feb 15 (Reuters) - U.S. stocks were headed for a
sharp drop at the open on Friday on worries about the outlook
for the economy and more credit losses at banks.

A profit warning from electronics retailer Best Buy
added to concerns about the health of the consumer.

Economic data that showed a jump in import prices and a
record monthly drop in a measure of manufacturing activity in
New York state raised fears of rising inflation and slowing
growth, or "stagflation."

Financial shares fell on concerns about more credit losses.
Brokerage Fox-Pitt cut its profit estimates on Goldman Sachs
and Morgan Stanley , citing challenges in the
credit markets and saying it sees more write-downs.

"Today's data again speaks to concerns about the consumer,"
said Joseph Battipaglia, market strategist at Stifel Nicolaus
in Yardley, Pennsylvania. "And the market didn't take kindly to
the outlook from Best Buy. The downward bias in the market will
continue."

S&P 500 futures fell 8.80 points, below fair value,
a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the
contract.

Dow Jones industrial average futures fell 88 points.
Nasdaq 100 futures fell 12.50 points.

Best Buy shares fell 4.5 percent before the bell, dragging
down other retailers' shares, including Circuit City .

Morgan Stanley shares fell 1.3 percent and Goldman Sachs'
shares fell 1.2 percent.

In addition, Citigroup Inc has barred investors in
one of its hedge funds from withdrawing their money, and a new
leveraged fund lost 52 percent in its first three months, the
Wall Street Journal reported. For details, see
[ID:nN15541588].

Worries about the deteriorating credit markets were
exacerbated on Thursday after Moody's Investors Service slashed
the credit rating of a bond insurer. The downgrade could lead
to more write-downs at banks.