Before the bell 6-7-07: Futures decline as yields rise and retail sales are released

Stock futures were up earlier but changed direction and are now indicating stocks may start lower today, again, continuing the trend of the past two days of sharp declines. Higher bond yields and initial retail sales data are causing concerns.

Yesterday was the second day U.S. stocks suffered from heavy losses as investors were concerned about the direction of interest rates.
The yield on the benchmark 10-year Treasury note fell yesterday to 4.97% from 4.98% late Tuesday as investors were watching carefully this past month as it approached 5%. Treasury prices continued to fall this morning, lifting the yield on the 10-year notes above 5%. It hasn't closed above 5% in over nine months. This compounded investors concerns.
Many economists, however, maintain that the overall fundamentals that have pushed stocks up this year haven't really changed.

Today, there isn't much economic data released.
At 8:30 a.m., weekly jobless claims are due.
At 10:00 a.m., April inventories will be released and at 3:00 p.m. April consumer credit will be reported.
The main event will be retail sales, however as retailers will release May same-store sales throughout the day. Mostly sales aren't expected to be bad. Costco (NASDAQ: COST) already reported that in May total sales rose 11% to $5.14 billion while same-store sales rose 7, beating analysts' forecast.

Overseas, the Bank of England held key interest rates, as expected, a day after the ECB raised rates. Asian stocks mostly fell except for Tokyo that finished up 0.07%. European stocks generally showed declines as well.

Corporate news:

It seems Rupert Murdoch of News Corp (NYSE: NWS) may have a competitor as the company that owns The Philadelphia Inquirer may be interested in joining a bid to buy Dow Jones & Co. (NYSE: DJ), publisher of The Wall Street Journal, according to Brian Tierney, chief executive officer of Philadelphia Media Holdings L.L.C.

Lehman Brothers downgraded Procter & Gamble (NYSE: PG) to Equal-Weight from Overweight, saying the company would have a hard time delivering above-average returns.

Finally, the ground beef recall reported yesterday was expanded due to fears it may be contaminated with the E.coli bacteria.