Wall Street to open lower on earnings, economic woes

NEW YORK (Reuters) - Wall Street was set for a lower open on Thursday, pressured by a weak earnings season and an increasingly bleak economic outlook after data showed continuing jobless claims rose to the highest level on record.

Among the latest results, Allstate Corp shed 16.7 percent to $24.70 before the opening bell after the largest publicly traded U.S. home and auto insurer posted a hefty loss on soured investments.

Shares of widely held Dow component Exxon Mobil were down 2.1 percent at $77.55 after Goldman Sachs removed the company from its Americas Buy list, saying it saw better investment opportunities among energy companies at this time.

Data also showed new U.S. orders for durable goods dropped in December for the fifth straight month, highlighting the deepening economic slowdown.

"The numbers are very weak across the board," said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Connecticut.

"All the data through December is reflecting the credit shock that occurred through the fall, and it is indicative of an economy that is contracting at a very rapid pace."

S&P 500 futures fell 12.30 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were down 85 points, and Nasdaq 100 futures lost 8.00 points.

Worries that President Barack Obama's $825 billion economic stimulus package could still face a bumpy road also weighed after the U.S. House of Representatives passed it late on Wednesday although every Republican who voted opposed it.

The Senate begins debate next week.

Ford Motor Co was flat after earlier gains as the ailing automaker posted a loss but saw a lower cash burn rate than expected and reaffirmed it plans to go ahead without government loans.

Starbucks Corp was among a host of companies to slash jobs when it reported lower quarterly profit after the bell on Wednesday as sales fell globally. The coffee chain's shares were down 3.6 percent at $9.30.

Stocks rose on Wednesday as financial stocks soared on optimism the Obama administration was making progress on a plan to relieve banks of money-losing assets.

The Wall Street Journal reported on Thursday that government officials looking to revamp the financial bailout have discussed spending another $1 trillion to $2 trillion.

With Wednesday's advance, the benchmark S&P 500 capped its fourth straight day of gains, its longest run-up in two months. Year to date, the benchmark S&P 500 is down 3.2 percent, a marked improvement from a 6.4 percent loss seen at Tuesday's close.

(Additional reporting by Ryan Vlastelica; Editing by James Dalgleish)

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