NEW YORK (CBS.MW) -- Stocks are set for a somber open Wednesday as a feeble rise in retail sales tempered enthusiasm on the economic recovery, sending the futures markets sharply lower.
February retail sales rose 0.3 percent overall and 0.2 percent when stripping out the fickle autos component. Economists had expected overall growth of 1 percent and 0.7 percent when excluding autos.
The futures markets turned lower as the data hit the tape. The March S&P 500 contract declined 3.30 points, or 0.3 percent, and was trading around 2.10 points below fair value, according to HL Camp & Co. Nasdaq futures, meanwhile, slipped 20.00 points, or 1.2 percent and were trading roughly 15.50 points under fair value figures.
The week's most significant economic release came in weaker-than-expected, breaking the powerful streak of sturdier-than-projected economic news.
Meanwhile, Wall Street analysts had less-than-rosy comments on the chip equipment segment.
Lehman Brothers said it remains cautious on the overall semiconductor equipment industry due to the group's high valuations and expectations for only a modest recovery in the second half of the year.
"Until wee see more convincing evidence that the electronics end markets are improving, and excess capacity will become better utilized, we remain cautious," commented analyst Ted Berg in a research note.
Meanwhile, PC industry researcher IDC upped its 2002 growth forecast for worldwide PC shipments to 3 percent from the previous 1.8 percent, indicating that retail sales in the U.S. and growing demand in Western Europe were the main drivers of the upward revision.
With growing signs of economic recovery supporting the market, IDC said both consumers and commercial buyers are feeling more confident making significant IT purchases.
In corporate news, TRW (NYSE: TRW - news) determined that Northrop Grumman's (NYSE: NOC - news) latest bid to buy the company for $47 a share was "financially inadequate" and not in the best interests of its shareholders. TRW said Northorp's offer remains below the current market price for its shares. TRW also said it believes shareholder value can be enhanced by executing a strategic plan, which may include the separation of its automotive business.
Treasurys waver
Treasury issues wilted after a two-day break from a seven-day selling spree that took the benchmark 10-year's yield to its highest level since early July 2001.
The 10-year Treasury note eased 9/32 to yield 5.345 percent while the 30-year government bond forfeited 1/4 to yield 5.74 percent.
In the currency sector, the dollar edged up 0.1 percent to 129.32 yen while the euro slumped 0.3 percent to 87.27 cents.
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