Wall St to open lower as earnings weigh

By @ibtimes on

Wall street was set to open lower on Thursday as disappointing earnings overshadowed stronger-than-expected data on weekly U.S. jobless benefits claims.

Cisco Systems Inc shares tumbled more than 10 percent to $19.75 before the open a day after the network equipment maker warned about dwindling public spending and reported weaker quarterly margins.

New U.S. claims for unemployment benefits dropped to their lowest in 2-1/2 years, the government said in a sign the labor market was improving.

Results were not overwhelming, so the market hasn't had that much of a reaction (to the better data), at least so far, said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.

We could be seeing a little bit of profit taking.

S&P 500 futures fell 7.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures tumbled 49 points, and Nasdaq 100 futures were off 20.25 points.

The S&P 500 index's chart shows near-term technical support at the 1,313 level, getting stronger near 1,300.

Overseas, disappointing earnings also hurt sentiment as Credit Suisse missed profit expectations. The bank's U.S.-traded shares dropped 5.9 percent to $43.90.

Soft drink and snacks maker PepsiCo Inc cut its full-year earnings growth target, citing higher commodity costs, a difficult economy and investments in emerging markets. Its shares fell 1.3 percent to $63.60 premarket.

Also weighing on equities, yields rose in indebted European countries on concern over the lack of a concrete policy to tackle the euro zone's debt crisis. The U.S. dollar gained versus the euro and pulled commodity prices lower.

At 10 a.m. (1500 GMT), the Commerce Department will release wholesale inventories for December. Economists forecast a 0.7 percent rise versus a November decrease of 0.2 percent.

On Wednesday, investors took profits but a late push helped the Dow squeeze out its eighth straight day of gains.

(Reporting by Rodrigo Campos, additional reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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