* Initial jobless claims roughly in line with expectations
* Ingersoll Rand lowers outlook
* GM, Chrysler reopen merger talks - report
* For up-to-the-minute market news, please click on
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By Leah Schnurr
NEW YORK, Dec 18 (Reuters) - Wall Street was set for a
higher open on Thursday as data on the labor market came in
roughly in line with expectations, lifting optimism about the
state of the anemic economy.
But more companies warned of a continuing difficult
environment, including Ingersoll Rand Co Ltd <IR.N>, which
lowered its fourth-quarter and full-year 2008 revenue and
earnings estimates, citing weakness in Europe. Shares of the
diversified manufacturer were down 1.5 percent at $16.10 in
premarket trade. For more see [].
In the auto sector, General Motors <GM.N> and Chrysler LLC
have reopened merger talks, the Wall Street Journal reported,
citing people familiar with the discussions. [].
The number of U.S. workers filing new claims for jobless
benefits fell last week, Labor Department data showed, but
despite the decline, claims remain exceptionally high and are
more than 200,000 higher than a year ago. [].
"On the earnings front, we seem to have a market that has
assumed the worst-case scenario has been priced in," said
Arthur Hogan, chief market analyst, Jefferies & Co in Boston.
"On the economic data front, that seems to be having a much
more intuitive effect on the marketplace, meaning negative news
pushes the market in a negative direction, so we'll have to see
how things unfold today."
S&P 500 futures <SPc2> rose 7.30 points and were above 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 <DJc2> climbed
76 points, and Nasdaq 100 <NDc2> futures added 5.25 points.
The Journal report said Chrysler owner Cerberus Capital
Management LP [] has signaled its willingness to cede
part of its ownership in the automaker. GM and Chrysler have
been lobbying Washington for a financial lifeline to help them
weather slumping demand and tight consumer credit.
FedEx <FDX.N> rose 2.3 percent to $65.45 in premarket trade
after the package delivery company posted a higher quarterly
profit but gave a gloomy picture of the economy next year.
FedEx said it was taking action to cut costs.
Other companies expected to report results are world No. 3
software maker Oracle <ORCL.O> and Carnival Corp <CCL.N>.
After the close on Wednesday, video game publisher Take-Two
Interactive Software <TTWO.O> reported a quarterly loss and
issued a 2009 forecast that fell short of expectations.
As well as Ingersoll Rand, Pentair <PNR.N> cut its
fourth-quarter earnings expectations and said it would cut over
10 percent of its workforce and close facilities to cut costs.
In the financial sector, Dick Bove, a widely followed bank
analyst with Ladenburg Thalmann, widened his fourth-quarter
loss estimate for Citigroup <C.N>, saying the bank may take
significant writedowns in its capital markets operations,
similar to those seen from Goldman Sachs Group Inc <GS.N> and
Morgan Stanley <MS.N> this week. [].
On Wednesday, Bove raised his price target and profit view
on Morgan Stanley, helping the stock reverse a loss and end
higher.
The latest data showed more signs of recession around the
world as German corporate sentiment deteriorated sharply in
December, while British mortgage lending tumbled 51 percent
year-on-year. [].
On Tuesday, the Federal Reserve -- the U.S. central bank --
cut its benchmark interest rate target to near zero and pledged
further action to stave off the year-long recession.
On Wednesday, stocks fell as the government's effort to
pull the U.S. economy out of recession raised worries about
mounting public debt and blunted optimism raised by the Fed's
move.
(Editing by James Dalgleish)
