Stock head for higher open as retail sales reports arrive

Thursday, May 08, 2008 - 01:04 PM

By MADLEN READ
AP Business Writer

NEW YORK

Wall Street headed for a modestly higher open Thursday as investors sifted through the first of retailers´ April sales figures, trying to get a sense of how consumers are faring in a climate of economic weakness and rising costs.

Wal-Mart Stores Inc., for one, said sales of groceries, flat-screen TVs and medications helped boost sales at stores open for at least a year by 3.2 percent in April _ more than analysts anticipated. But apparel stores, whose merchandise falls into the category of discretionary items, appeared to be still struggling, an indication that consumers remain very cautious as they pay more for gasoline and food.

The sales readings come a day after soaring oil prices knocked the Dow Jones industrial average down more than 200 points. In premarket electronic trading Thursday on the New York Mercantile Exchange, crude rose 24 cents to $123.77 a barrel, after reaching a record of nearly $124 late Wednesday in electronic trading.

Another factor weighing on consumers has been the job market _ the United States has seen four straight months of net jobs losses. However, in a positive sign, the Labor Department said Thursday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000, a larger decline than expected.

Early Thursday, Dow futures rose 25, or 0.19 percent, to 12,861. Standard & Poor´s 500 index futures rose 4.60, or 0.33 percent, to 1,399.90, and Nasdaq 100 index futures rose 5.50, or 0.28 percent, to 1,966.00.

Bond prices slipped ahead of the market´s open. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.87 percent from 3.85 percent late Wednesday.

Retailers´ figures come in following worrisome results from Toyota Motor Corp. Late Wednesday, the Japanese automaker said profit in the January-to-March period tumbled 28 percent due to the rising yen and weak North American sales. The maker of the Prius and Camry also predicted sales will drop for the fiscal year through March 2009 for the first time in several years, and that its profit will fall 27 percent.

In other earnings news, American International Group is scheduled to release its first-quarter results after the close of trading. Analysts expect the insurer to post a loss.

Gold prices rose, while the dollar traded mixed against other major global currencies.

In overseas trading, Japan´s stock market fell 1.13 percent. By afternoon in Europe, Britain´s FTSE index fell 0.11 percent, Germany´s DAX index fell 0.37 percent, and France´s CAC-40 fell 0.27 percent.

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