Before the bell: Futures mixed ahead of GDP; after COST, SHLD reporting

Posted May 29th 2008 7:41AM by Melly Alazraki
Filed under: Before the Bell, Earnings Reports, General Motors (GM), Employees, Market Matters, Sears Holdings (SHLD), Costco Wholesale (COST), Economic Data, Oil, Federal Reserve

Stock futures were somewhat lower early Thursday morning, but then started to reverse course, as investors awaited a revision first quarter GDP as well as better indication on oil supplies. Several major retailers and consumer companies are also reporting. For now, futures are mixed, but it seems momentum might push stocks higher.

On Wednesday, U.S. stocks rose after lower drop than estimated in durable goods orders. Yields on 10-year Treasury bonds passed 4% for the first time since January. There were indications that the Federal Reserve might reconsider its rate cut policy. The Dow industrials rose 45 points, or 0.36%, the Nasdaq Composite added 5 points, or 0.22%, and the S&P 500 rose 5 points, or 0.40%.

The economic calendar is busier today with a release at 8:30 a.m. EDT of the revised first quarter reading on gross domestic product, the broadest measure of U.S. economic activity. Economists expect GDP to be revised upward to 0.9% from 0.6%.
Also at 8:30, weekly initial jobless claims will be reported for an update on the labor market.
At 10:30 a.m., weekly crude inventories numbers will be released and could affect oil trade. So far, oil has dropped somewhat ahead of the report that is expected to show U.S. inventories of crude and petroleum products grew last week.

On the corporate side, several retailers have reported, most notably, Sears and Costco.

Sears Holdings (NASDAQ: SHLD) reported an unexpected loss for is first quarter as it increased promotions and markdowns to clear slow-moving merchandise. Sears lost $56 million, or 43 cents per share, while Wall Street expected a gain of 15 cents per share. It warned it expects its sales and margins to be pressured for the rest of the year due to tough economic conditions. SHLD shares are down 4% in premarket trading.

Meanwhile, wholesale club retailer Costco (NASDAQ: COST) reported that fiscal third-quarter profit climbed 32% to to $295.1 million, or 67 cents per share, beating Wall Street expectations of 65 cents per share. Seems that cash-squeezed customers were looking for bargains in its warehouse clubs. COST shares, however are also down in premarket trading and were 1.7% lower at 7:18 a.m.

And not speaking of earnings, but something else we seem to hear every day as well, General Motors (NYSE: GM) is working on additional restructuring measures, according to Associated Press. These will no doubt include further adjustment to product mix and cost cut measures, which will no doubt include further reduction to its work force.

Tags: cost, featured, gm, shld