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Wall Street seen down again on rate worries
Thursday September 7, 6:28 am ET


PARIS (Reuters) - U.S. shares are expected to fall on Thursday as investors wrestle with worries about inflation, interest rates and economic growth, with economically sensitive sectors such as technology likely to be hurt again.


Investors awaited comments by Federal Reserve Bank of San Francisco President Janet Yellen at 1840 GMT for clues on monetary policy.

By 1000 GMT, U.S. stock futures were pointing to opening losses of about 0.3 percent for the three main indexes (SPc1) (DJc1) (NDc1), despite oil prices stabilizing below $68 a barrel, as fears that inflationary pressures may force the Federal Reserve to again lift rates continued to sap sentiment.

"Inflation jitters still remain as wage inflation numbers shocked investors after a lull in negative sentiment as other economic indicators had shown that inflation was gradually under control," said Matthew Bristow, head of trading at Pacific Continental Securities in London.

"Investors will be more closely looking at coming economic indicators as the decision on rate hikes has become more uncertain. Wage costs have to be absorbed either by the producer or consumer which will result in slower growth."

Bristow said a report on wholesale inventory at 1400 GMT will give clues on the extent of slowing spending in the world's largest economy.

On Wednesday, the Dow Jones industrial average (^DJI - News) shed 0.55 percent at 11,406.20, and the Standard & Poor's 500 Index (^SPX - News) was down 0.99 percent at 1,300.26, while the tech-laced Nasdaq Composite Index (NASDAQ:^IXIC - News) fell 1.72 percent to 2,167.84.

Corporate movers on Thursday will likely include Hovnanian Enterprises Inc. (NYSE:HOV - News). Shares in the builder of high-end homes rose 4 percent after the closing bell on Wednesday as the company reported a quarterly profit that beat expectations.

On the downside, Martek Biosciences Corp. (NASDAQ:MATK - News) fell 17 percent after the closing bell on Wednesday after the biotechnology company posted quarterly results.

Elsewhere, California's attorney general said his office sent out subpoenas on Wednesday in a probe into whether Hewlett-Packard Co. (NYSE:HPQ - News) used illegal means to investigate 2005 boardroom leaks.

And Sun Microsystems Inc. (NASDAQ:SUNW - News) said late on Wednesday that John Doerr, Silicon Valley's most famous venture capitalist and one of Sun's original investors, planned to resign from the computer maker's board.