Recovery doubts and UK worry to slam Wall Street
Stocks headed for a slide at Thursday's opening as signs of further labor market weakness fueled doubts about a quick economic recovery and Britain's reduced rating outlook signaled more fallout from the credit crisis.
Financials were poised to be among the top drags, with the Financial Select Sector SPDR exchange-traded fund
Shares of Bank of America Corp
The number of U.S. workers filing new claims for jobless aid fell by 12,000 last week, Labor Department data showed, while so-called continued claims rose to a new record as the recession battered employment.
The data came a day after the U.S. Federal Reserve gave a more pessimistic view for economic recovery, denting optimism that had underpinned the stock market's recent climb from the 12-year lows of early March.
I think the numbers continue to show a weak economy. I would say that equities have run more ahead of reality, so I expect a pullback. If you look at the trend of the jobless numbers, the rate of slowing down isn't here, said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.
S&P 500 futures fell 10.70 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 shed 93 points, and Nasdaq 100 futures dipped 14 points.
Credit ratings agency Standard & Poor's cut its outlook on Britain to negative on Thursday for the first time, saying government debt could near 100 percent of gross domestic product.
Analysts said the move raised fears of a similar fallout in other countries as governments spend money to spur an economic recovery.
(Reporting by Ellis Mnyandu; additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)
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