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US STOCKS-Wall St set for weaker open after data, FedEx slips

Published 09/16/2010, 09:07 AM
Updated 09/16/2010, 09:12 AM

* Initial jobless claims unexpectedly fall last week

* FedEx shrs drop after profit misses view

* Futures off: Dow 40 pts, S&P 5.2 pts, Nasdaq 8.5 pts (Adds details, recasts)

By Leah Schnurr

NEW YORK, Sept 16 (Reuters) - Wall Street was poised for a weak open on Thursday as jobless claims dropped to a two-month low but still remained high, and shipping group FedEx slid after it posted profits shy of forecasts.

The market has been struggling to break out of the top of a trading range where it has been stuck for days, making traders wary.

The number of people filing first-time jobless claims unexpectedly fell last week, data showed, while producer prices rose more than expected in August.

"Claims were pretty much right in line with last week and better than expected, but even when we have better-than-expected numbers, they're not good because they remain so high," said Dan Cook, senior market analyst at IG Markets in Chicago.

"We've had a drift up since Monday, but we're in something of a pause. I don't see anything changing that. I think we'll just be testing the highs from June and August."

FedEx Corp reported that quarterly profit more than doubled, but missed estimates by a penny, and it forecast a light second quarter. The shares fell 2.9 percent to $83.45 in premarket trading.

The world's No. 3 software maker Oracle Corp and BlackBerry maker Research In Motion Ltd also report quarterly results later in the day.

All three companies are considered bellwethers of the economy and their respective sectors.

The S&P 500 has found support at its 200-day moving average around the 1,115 level, but the benchmark index has been unable to pierce the 1,130 threshold, seen as a key resistance level by analysts.

S&P 500 futures dipped 5.2 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 were off 40 points, and Nasdaq 100 futures slipped 8.5 points. Wall Street advanced on Wednesday.

Still to come on the economic front is the Philadelphia Fed survey, due at 10 a.m. EDT (1400 GMT) and seen rising to 2 in September from minus 7.7 the month before.

Focus was also on the foreign exchange market, where the yen edged up against the dollar and other currencies as Japanese authorities stayed away from the market after their massive yen-selling operation the previous day.

Pier 1 Imports Inc rose 2.4 percent to $8.15 after the home decor chain reported a higher-than-expected quarterly profit early Thursday.

A Reuters poll found institutional investors and strategists expect U.S. stocks to make strong gains before year-end as worries about a second recession subside, but they scaled back forecasts slightly from a June survey.

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