[R]9:45AM Stocks opened in the negative.[/R]
U.S. stock markets opened in the negative, reflecting growing concerns about further interest rate increases after a pair of European central banks raised interest rates. Mixed monthly retail sales also contributed to the negative mood. The stock market's decline came despite a slight rise in weekly first-time unemployment claims. First-time claims rose to 315,000, up from 301,000 the previous week.

Wal-Mart Stores Inc. (WMT: chart) gained 0.3% after reporting a 2.4% gain in same-store sales. Limited Brands Inc. (LTD: chart), operator of retailers such as Victoria's Secret and Bath & Body Works, rose 3.6% after posting a 7% jump in same-store sales. Target Corp. (TGT: chart) posted a lower-than-expected 3.1% increase in same-store sales, sending company’s shares down 1%. Gap Inc. (GPS: chart) dropped 3% after the clothing retailer said its sales dropped 4 percent for July.

The early weakness was partly due to some disappointing earnings news. Conglomerate Tyco International Ltd. (TYC: chart) said its quarterly profits fell from a year ago due to one-time charges and stock option expenses. In midmorning trading, the Dow Jones industrial average fell 29.86, or 0.27%.

Commodity stocks were among the worst performers in the first half hour of trading. Oil prices fell as the storm in the Caribbean lost strength overnight, dragging energy stocks lower. The gold sector also declined in the early going, sliding by about 1.8%. The coal sector continued the profit taking that began in the previous session. Telecommunications stocks also came under pressure in early trading, with Sprint Nextel (S: chart) helping to lead the sector lower after the company reported Q2 earnings that fell sharply year-over-year. Internet stocks moved modestly higher during Thursday's early trading, with eBay (EBAY: chart) rising 1.5%. The drug, chemical and bank sectors also posted some strength. The Standard & Poor's 500 index lost 6.08, or 0.48%, and the Nasdaq composite index dropped 14.16, or 0.68%. Bonds fell in response to the European rate hikes, with the yield on the benchmark 10-year Treasury note rising to 4.98% from 4.96% late Wednesday.


[R]Initial jobless claims rose more than expected.[/R]
Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended July 29. The report showed that jobless claims rose more than economists had been expecting. The report said that initial jobless claims rose to 315,000 from the previous week''s revised figure of 301,000. Economists had expected jobless claims to increase to 305,000 compared to the 298,000 originally reported for the previous week. The Labor Department also said that the four-week moving average rose to 313,750 from the previous week''s revised average of 313,500. The increase comes after the less volatile moving average fell in the two previous weeks. The report also showed that continuing claims in the week ended July 22 rose to 2.498 million from the preceding week''s revised level of 2.469 million. The bigger than expected increase in jobless claims may raise some concerns about the strength of the July employment report due to be released on Friday. The report is expected to show that the U.S. economy added 150,000 jobs in July.


[R]9:00AM Stock futures pointed to a lower start on rates worries[/R]
U.S. stock futures moved lower, following a surprising interest-rate increase by the Bank of England''s which raised concern about more global rate increases. Negative sentiment was also generated by disappointing sales report from Starbucks Corp. (SBUX: chart), weighing on the outlook for consumer spending. Starbucks shares dropped 9.6% before the bell on the Inet.

The Bank of England on Thursday surprisingly hiked its key interest rate by a quarter point to 4.75%. That move was followed by the European Central Bank''s raising interest rates, also by a quarter point, to 3%. The Fed Reserve will meet on Tuesday to decide on rates.

Automaker Ford Motor Co. (F: chart) on Wednesday said its Q2 loss was more than double what it previously reported due to higher pension-related costs. Ford shares dropped 4%. Medical device maker Medtronic Inc. (MDT: chart) warned its quarterly revenue and earnings would fall short of expectations due to a decline in the U.S. market for its implantable devices. The stock dropped more than 9% on Inet. S&P 500 futures were down 5.30 points, below fair value. Dow Jones industrial average futures fell 36 points, and Nasdaq 100 futures were down 7.75 points.


Cooper Tire & Rubber Co, (CTB: chart), manufacturer of replacement tires, reported its Q2 loss widened to 34 cents a share, from 11 cents a share, in the year-ago period. On a continuing operations basis, the company lost 10 cents a share in Q2. Sales advanced to $624.8 million from $510.9 million in the same period a year earlier. The company missed analysts’ estimate for a loss of 7 cents a share.

Patterson-UTI Energy Inc, (PTEN: chart), provider of onshore contract drilling services, reported that Q2 net income more than doubled on 63% higher revenue. Net reached $1 a share, from 43 cents, in the year-earlier period. The company beat analysts’ expectations for earnings of 95 cents for PTEN. Revenue grew to $637 million from $390 million.

LaBranche & Co. Inc, (LAB: chart), holding company, reported that it swung to a Q2 loss of 37 cents a share, from year-ago net income of 14 cents a share. Revenue fell to $53.2 million from $77.7 million. Included in the revenue figure was a pre-tax loss of approximately $30.3 million in connection with the decline of the estimated fair value of the restricted shares of NYSE Group, Inc. common stock held by LaBranche. If not for charges, LaBranche lost 9 cents a share in the latest period, missing on that basis analysts’ forecasts for earnings of 11 cents a share..

Investment Technology Group, (ITG: chart), electronic trading firm, reported its Q2 profit rose 60% to 63 cents a share from 41 cents a share in the year-ago period. Total revenue for Q2 rose to $153.6 million from $102.2 million. The company beat analysts’ expectations for earnings of 55 cents a share.

Revlon Inc, (REV: chart), mass-marketer of cosmetics brands, reported Q2 net loss more than doubled to 21 cents a share, from a loss of $ 10 cents a share in the year-ago period. Sales rose 1% to $321 million. Adjusted loss before interest, taxes, depreciation and amortziation narrowed to $20 million from $24 million. The company topped analysts’ forecasts for a loss of 23 cents a share.


[R]8:00AM Starbucks reported 16% profit rise and 6% same-store sales growth in Q3.[/R]
Starbucks (SBUX: chart) reported it earned $145 million, or 18 cents a share in Q3, up from $125.5 million, or 16 cents, in the year-ago period, beating estimates of 17 cents a share. The 16% profit rise and 23% growth in revenue to $1.96 billion are due to new outlets, along with same-store sales gains. Same-store sales at the Seattle-based coffee chain rose 6%.

For the quarter, company-operated retail revenues rose 22% to $1.7 billion, largely on the back of 955 new stores and same-store sales growth. Starbucks added that its July revenue climbed 20% to $596 million on a same-store sales increase of 4%, vs. expectations of 6.4% and a 7% rise in July of 2005.

Starbucks forecasted earnings from 72 cents to 73 cents a share for the full year, up from 61 cents in fiscal 2005 and in-line with analyst estimates. Revenue growth of for the year will be about 20%, with same store sales up 3% to 7%. Starbucks also said it expects to open at least 2,000 net new stores on a global basis in fiscal 2006, an increase of 200 new stores than its previous target, leading it to boost its estimate of capital expenditures to $800 million from a previous $750 to $775 million.