Before the bell: Futures lower, ahead of retail sales, Bernanke speech

Posted Jan 10th 2008 7:46AM by Melly Alazraki
Filed under: Before the Bell, International Markets, Earnings Reports, Market Matters, Citigroup Inc. (C), Alcoa Inc (AA), Merrill Lynch (MER), Costco Wholesale (COST), Economic Data, Federal Reserve

Stock futures inched lower this morning, but seem to look for direction, somewhat cautious following yesterday's a late-session rally and ahead of a speech from Federal Reserve Chairman Ben Bernanke and retailers reporting December sales.

Wednesday, after going sideways most of the session, U.S. stocks rallied with the Dow industrials ending 146 points, or 1.16% higher, the S&P 500 was up nearly 19 points, or 1.36%, and the Nasdaq Composite snapped an eight-day losing streak to finally rise 34 points, or 1.39%.

Not much is on the economic docket today. Weekly initial jobless claims will be reported an hour before the opening bell, which may be looked at more than usual given the last employment report, and November wholesale inventories will be released after the session has started.
What investors will be focusing on this morning is December sales data from retailers, which is expected to be one of the weakest with an overall gain of 1%.
Already Costco Wholesale Corp. (NASDAQ: COST) said its December same-store sales rose 7%, beating analysts' expectations of 5.7%, according to Thomson Financial. Costco may be one of the few that beat estimates though.
Pier 1 Imports (NYSE: PIR) saw its sales rise 1.3% in the five weeks to Jan 5.

The Street is also waiting for Bernanke's speech later in the day, where he would address problems in the housing market.

Overseas, Asian market mostly fell. European markets remain mixed after the decision by the Bank of England to keep rates at 5.5%. The European Central Bank rate decision should be announced soon.

Oil prices continued to decline this morning after falling overnight due to U.S. crude inventory report from Wednesday showing that stockpiles of gasoline grew last week.

In corporate news, Capital One Financial Corp. (NYSE: COF) warned that its 2007 earnings will fall short of the company's previous expectations due to a rise in loan delinquencies, additional legal reserves in the fourth quarter and the weakening economy.

Alcoa Inc. (NYSE: AA) posted a 76% profit gain for the fourth quarter to $632 million, or 75 cents per share as the pending sale of its consumer and packaging businesses offset lower prices. Excluding one-time gains of 38 cents, the company beat estimates of 33 cents per share according to Thomson Financial. Shares are rising 3.4% in premarket trading.

The Wall Street Journal reported that Citigroup (NYSE: C) and Merrill Lynch & Co. (NYSE: MER) are both negotiating further capital injections from overseas investors.

Tags: aa, c, cof, cost, featured, mer, pir