Wall Street set to drop on economic anxiety

NEW YORK (Reuters) - Stocks headed for a drop at the open on Thursday as investors worried that government efforts may not be enough to revive the economy and stabilize banks, overshadowing news of a surprise rise in January retail sales.

Financial shares looked set to fall again due to persistent unease about the Obama administration's bailout plan, which analysts said lacks clarity about how it would alleviate toxic assets from the bank's books.

Before the bell, shares of Bank of America declined 5.7 percent to $5.73, while Citigroup dropped 4.3 percent to $3.53, and Wells Fargo fell 3.3 percent to $16.92.

The losses would likely be limited by some optimism spurred by news that total retail sales unexpectedly rose by 1 percent in January. It was the first advance in seven months.

"One month doesn't make a trend, but on the other hand, up is much better than down. I'd have to say this is a very encouraging number," said David Wyss, chief economist, Standard & Poor's in New York. "I'm not ready to declare the recession over, but there is some hope that people aren't panicking as much as we thought they were."

S&P 500 futures fell 7.40 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 66 points, and Nasdaq 100 futures lost 3.50 points.

Bright spots will include Coca-Cola Co , up about 3 percent at $42.42 after posting a solid quarterly profit.

However, Aetna Inc dropped more than 4 percent to $30.65 before the bell after the health insurer posted a 57 percent drop in quarterly profit.

Although Congress prepared to pass as early as Thursday a $789 billion economic stimulus package, investors are worried it may not be enough to end the 14-month-old recession.

(Editing by Tom Hals)