Wall Street was set for a lower open on Thursday, following global stocks lower, on persistent fears that Greece's debt crisis would spread through Europe.
An unexpected rise in new claims for jobless benefits threw cold water on optimism about the state of the labor market, and further hurt sentiment. Initial claims for state unemployment benefits rose 18,000 to 460,000, the Labor Department said.
Markets pounded Greek bonds and banking stocks, driving the country's borrowing costs to new highs and pushing it closer to tapping a last-resort safety net.
This (Greece's debt woe) keeps dragging on, and defaults could start to happen all at once, said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. No one knows the repercussions of an event like that, but a lot of European countries have exposure to Greece.
S&P 500 futures fell 3.8 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 dropped 29 points, and Nasdaq 100 futures lost 6.5 points.
The fearful mood in Europe hurt world stocks. MSCI's all-country world index was down 0.6 percent. The pan-European FTSEurofirst 300 lost more than 1 percent.
Retail stocks may offset the negative macroeconomic news as the early Easter holiday helped U.S. retailers beat Wall Street sales expectations. With more than 90 percent of 28 major retailers reporting, total March same-store sales rose 9.1 percent, while Wall Street looked for a 6.3 percent increase, according to Thomson Reuters data.
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U.S. equities pulled backed Wednesday after hitting levels not seen in a year and half. The Dow industrials fell back from the psychologically key 11,000 level, with some analysts saying investors are taking profits, with no catalyst to drive the market higher.
(Reporting by Edward Krudy; Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)