* Market rally may be losing steam
* Egypt unrest escalates
* Initial U.S. jobless claims expected to decline
* U.S. factory, non-manufacturing ISM data due
* Futures: Dow down 13 pts, S&P off 1.9 pt, Nasdaq down
1.75
* For up-to-the-minute market news see []
(Adds quote, same-store sales results, Merck earnings)
By Chuck Mikolajczak
NEW YORK, Feb 3 (Reuters) - U.S. stock index futures edged
lower on Thursday as investors weighed the prospects of some
solid U.S. economic data against increasing discord in Egypt
and worries that a rally that may be losing steam.
Data on Thursday includes U.S. December factory orders and
the Institute for Supply Management's (ISM) January
non-manufacturing index, both at 10 a.m. [].
Factory orders are expected to have declined by 0.5 percent
in December after rising 0.7 percent in November.
December's non-manufacturing ISM index is expected to be read
57.0, about in-line with November.
Investors will look for clues on the health of the labor
market ahead of Friday's key U.S. non-farm payrolls report in
the weekly jobless claims data at 8:30 a.m. A Reuters poll
shows claims are expected to drop to 420,000.
"On the positive side for the market, good numbers will be
seen as further indication of the growth of the economy, bad
numbers will be seen as weather-influenced," said Rick Meckler,
president of investment firm LibertyView Capital Management in
New York.
Better-than-expected readings of economic growth might not
be enough to dislodge investor worries about rising unrest in
Egypt, where gunmen fired on anti-government protesters in
Cairo. The fighting killed six and wounded more than 800
people, prompting new calls from Western powers for President
Hosni Mubarak to start handing over power immediately. For
details, see [] and []
"The initial shock has already hit and it is going to take
more meaningful developments there to influence markets the way
it did when it first occurred," Meckler said.
"However, if for some reason fighting breaks out on a very
wide scale, or it appears to have some impact in terms of Suez
Canal disruptions or if it spreads to other countries, you will
have investors reassessing that," he said.
The S&P 500 <.SPX> started to look overbought for the
second straight session after reaching 2 1/2-year highs on
Tuesday as resistance near the 450 level for the PHLX
Semiconductor Index <.SOX> suggested stocks were vulnerable to
a correction.
S&P 500 futures <SPc1> slipped 1.9 points and were slightly
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 <DJc1>
fell 13 7 points, and Nasdaq 100 futures <NDc1> fell 1.75
points.
Merck & Co <MRK.N> fell 1.8 percent to $33.22 in premarket
after the drugmaker forecast 2011 earnings below Wall Street
forecasts and withdrew its longer-term profit view.
Retailers will also be in focus as companies post their
January sales results. According to Thomson Reuters data, of
the 11 of 28 retailers reporting sales so far, six have topped
analyst expectations.
U.S. warehouse club operator Costco Wholesale Corp <COST.O>
posted a higher-than-expected 9 percent rise in January sales
at stores open at least a year. []
(Editing by Padraic Cassidy)
