Futures point to lower open with corporate America continuing to cut jobs. AT&T (T), DuPont (DD) and Credit Suisse (CS) all announced layoffs a day ahead of the key employment data. Even large rate cuts in Europe and England have not provided strength for futures. Economic news Thursday could keep volatility high with jobless claims and chain store sales reported today.

Jobless claims for the week ending Nov. 29 actually declined by 21,000, putting claims at a level of 509,000. This was better than the expected reading of 529,000, though the four-week moving average rose by more than 6,000 to 524,500. With claims continuing to be above 500,000, nonfarm payrolls will likely fall by at least 250,000.

Speaking of job cuts, AT&T announced they will cut 12,000 jobs, equal to about 4 percent of its workforce. DD also stated it would cut 2,500 jobs with CS looking to cut 5,300 jobs. Credit Suisse also warned that its fourth quarter results would fall below expectations. T shares are off 2.5 percent with DD down nearly 7 percent, but CS is up almost 2 percent in pre-market trading.

Retail stocks will be in focus this morning on the release of same-store sales data for November. Ironically, the sectors leader, Wal-Mart (WMT), continues to outperform its peers in the retail sector. WMT is benefiting from a price cautious consumer with the company seeing same store sales in November rise 3.4 percent, easily surpassing expectations for growth of 2.1 percent. WMT shares are poised to gain more than 2 percent at the open. Other retailers aren’t seeing this strength with Limited Brands (LTD) seeing same-store sales fall 12 percent. Costco (COST) and Aeropostale (ARO) sales were off 5 percent each during the month, sending their shares down slightly in pre-market trading.  

The Bank of England [BOE] and the European Central Bank [ECB] both announced large rate cuts this morning. The BOE will cut its key lending rate by 100 basis points with the ECB lower its rate by 75-basis points. This is important for the global economy, but is having little impact on the U.S. stock market Thursday. The FOMC is also expected to cut rates further when the committee meets on Dec. 15-16.

Nokia (NOK) and Merck (MRK) both warned about future results this morning, yet NOK is up more than 4 percent in pre-market trading while MRK is down nearly 4 percent. NOK lowered its outlook for the second time in three weeks, stating that the slowdown has accelerated and that 2009 would be a very tough year. MRK said that its 2009 results would be hurt in part due to a stronger dollar.  

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site