US stocks head for higher open
The Labor Department report that labor costs rose a 2.6 percent annual pace in the fourth quarter was unwelcome by investors. The concern is that rising prices will make it harder for the inflation-weary Federal Reserve to justify cutting interest rates to boost the economy.
It was the fastest cost-increase rate since the first quarter last year.
The report also found that productivity -- the amount than a worker produces for every hour on the job -- rose at an annual pace of 1.9 percent in the fourth quarter.
Adding to investors' list of concerns, payroll company Automatic Data Processing said the economy shed 23,000 private sector jobs in February, more than twice the loss of 10,000 jobs that had been forecast, according to Dow Jones Newswires.
Investors are also awaiting reports on factory orders, the state of the service sector and, Wednesday afternoon, the Federal Reserve's Beige Book report on economic conditions in various parts of the country. The Beige Book arrives two weeks before the central bank's next meeting.
The reports could offer further insights into the health of the economy. Erratic trading in Tuesday's session illustrates the market's nervousness and indecision about the economy. Stocks finished mixed after recovering from a sizable pullback amid rumors that a bond insurer rescue plan is moving ahead and on comments from Cisco Systems Inc. about its business.
The somewhat upbeat mood continued Wednesday, though the fresh round of economic figures dented some of the enthusiasm. Dow Jones industrial average futures, which had been up about 50 points before the arrival of the economic figures, recently were up 26, or 0.21 percent, at 12,248. Standard & Poor's 500 index futures rose 3.00, or 0.23 percent, to 1,330.00, and Nasdaq 100 index futures advanced 8.50, or 0.49 percent, to 1,751.00.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.59 percent from 3.63 percent late Tuesday.
The dollar was mostly higher against other major currencies, while gold prices rose.
Light, sweet crude rose $1.22 to $100.74 in premarket electronic trading on the New York Mercantile Exchange.
In corporate news, Pfizer Inc. affirmed its 2008 sales and profit forecasts and said it plans to outsource more drug manufacturing and reduce its global real estate holdings to lower costs. The drug maker, one of the 30 stocks that make up the Dow industrials, is cutting costs ahead of generic competition for its blockbuster cholesterol drug, Lipitor.
Costco Wholesale Corp.'s fiscal second-quarter earnings rose 31 percent from a year-earlier period that was weighed down by charges.
Costco rival BJ's Wholesale Club Inc. said it expects first-quarter same-store sales, or sales at stores open at least a year, will rise 4 percent to 6 percent excluding gas sales.
Saks Inc., parent of the high-end Saks Fifth Avenue department store chain, said its fiscal fourth-quarter profit rose 83 percent to $39.5 million from $21.5 million a year earlier.
French bank Credit Agricole SA said it swung to a hefty loss for the fourth quarter as it wrote down billions to cover its exposure to soured debt. The bank said it lost 857 million euros ($1.3 billion), compared with a profit of from 1.06 billion euros in the year-earlier period.
Overseas, Japan's Nikkei stock average closed down 0.16 percent. In afternoon trading, Britain's FTSE 100 rose 0.83 percent, Germany's DAX index rose 1.40 percent, and France's CAC-40 advanced 1.24 percent.
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