Wall St was set for a lower open on Thursday after rating agencies said they may downgrade Greece's sovereign debt, reigniting worries over possible defaults in the euro zone, and an increase in jobless claims fueled concerns about the U.S. economy.
Moody's said a change in Greece's rating would depend on whether Athens smoothly enacted fiscal reform plans, while Standard & Poor's said a downgrade by one or two notches in the next month remains possible. That could increase borrowing costs and exacerbate Greece's problems.
Also weighing on sentiment, the government said the number of U.S. workers filing initial claims for unemployment benefits rose to 496,000. The higher-than-expected number was the latest in a series of disappointing data this week, including consumer sentiment and house sales and prices.
When you're close to 500,000 in jobless claims, it shows that job gains will be very slow, said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto. The hope was that we'd have a faster recovery.
S&P 500 futures fell 12.3 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 100 points, and Nasdaq 100 futures were down 15.5 points.
The S&P 500 is up more than 40 percent from its 12-year low on March 9, but down nearly 4 percent from a 15-month peak reached last month.
A busy political calendar may divert investor attention from fundamental issues. Federal Reserve Chairman Ben Bernanke will resume his testimony on Capitol Hill, while U.S. President Barack Obama will launch a last-ditch bid to salvage his stalled healthcare overhaul.
In company news, Coca-Cola Co
Shares in pharmacy benefit manager Express Scripts Inc
(Reporting by Edward Krudy; Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)