Stock futures lower after jobs, income data

The stock market headed toward a lower open Thursday after two government reports suggested the economy is still poised for a slow recovery.

Stock futures were already down ahead of the release of the Labor Department’s weekly jobless claims report and the Commerce Department’s August data on personal income and consumption. Investors still await the Institute for Supply Management’s September manufacturing index and the National Association of Realtors has pending home sales figures.

Dow Jones industrial average futures fell 20, or 0.2 percent, at 9,633. Standard & Poor’s 500 index futures lost 3.40, or 0.3 percent, at 1,049.50, while Nasdaq 100 index futures fell 6.25, or 0.3 percent, at 1,711.25.

The Commerce Department said consumer spending surged by the largest amount in nearly eight years in August, as personal income growth lags. Consumer spending rose 1.3 percent and incomes edged up 0.2 percent.

Even so, economists worry whether that rebound can be sustained with U.S. households facing rising unemployment and tight credit conditions.

A day ahead of the Labor Department’s jobs report for September, a weekly unemployment report showed new jobless claims rose more than expected to 551,000, evidence that jobs remain scarce. Economists polled by Thomson Reuters had predicted claims to rise to 535,000.

The increase comes after three weeks of declines, and just before the Labor Department’s September unemployment report. Economists forecast that report will show the unemployment rate rose to 9.8 percent from 9.7 percent in August. Most economists expect the rate to top 10 percent by early next year.

Employers are expected to have cut 180,000 jobs in September, down from 216,000 in August.

Reports this week have raised investors’ doubts about the economic recovery and whether they should be continuing this year’s rally. The Dow Jones industrial average lost nearly 30 points Wednesday, as a disappointing report on Midwestern manufacturing contributed to the bearish tone.

Thursday’s early corporate news had little impact on the market. Cisco Systems Inc. agreed to buy Tandberg ASA, a Norwegian maker of hardware for video conferences, for $3 billion, signaling a continued uptick in mergers-and-acquisitions activity. An increase in corporate dealmaking has boosted investors’ hopes for a recovery and sent stocks soaring as recently as Monday, but the downbeat reports this week on the economy are still dominating the market.

Overseas markets fell, even as the International Monetary Fund said the global economy is recovering faster than expected, but warned it will be a sluggish recovery.

Later Thursday, the Institute for Supply Management will issue its assessments of the manufacturing sector for September. The index is forecast to come in at 54, up from 52.9 in August. Readings above 50 mean the sector is expanding.

The manufacturing report includes key components such as production and new orders, which the market looks at for signs of how industrial companies are likely to fare in the near future. The report is expected at 10 a.m. EDT.

The National Association of Realtors will report on pending home sales for August. The report, which tracks signed contracts to buy previously owned homes and is considered a gauge of future sales, is expected to rise to 98.6 in August, up from 97.6 in July. That report is also due at 10 a.m EDT.

Bond prices rose Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.29 percent from 3.31 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.10 percent from 0.11 percent late Wednesday.

The dollar mostly rose against other major currencies, while gold prices fell.

Overseas, Japan’s Nikkei stock average fell 1.5 percent. In afternoon trading, Britain’s FTSE 100 was down 0.6 percent, Germany’s DAX index was down 0.3 percent, and France’s CAC-40 was down 0.5 percent.