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Stocks are set to open lower Thursday following a round of uninspiring stock and economic news. About an hour before the start of trading in New York, stock index futures indicate that the Dow Jones Industrial Average might lose 40 or 50 points in early trading. The NASDAQ is indicated 5 to 10 points lower.
Weekly jobless claims rose in the final week of August. According to the Labor Department, the number of filings for jobless benefits increased by 15,000 to 444,000 in the week ended August 30. Economists were looking for a decline to 420,000.

Meanwhile, ADP is reporting that the US economy lost 33,000 private sector jobs last month, which follows a gain of 9,000 the month before. Economists were looking for the ADP report to show a loss of 30,000.
The jobs numbers hold a bit more sway than usual because they come just one day before the Labor Department releases key payroll data tomorrow morning. Economists expect Friday's report to show the economy losing another 75,000 jobs during the month of August.

While stock index futures are lower on today's disappointing data, bonds rose. The benchmark ten-year Treasury bond trading up 6/32nd and now yields 3.675 percent. 
Dollar strength continues, moving up to 108.30 on the yen and 1.4442 on the euro.
The Institute of Supply Management Services Index for August is due out at 10:00 a.m. Eastern time. Economists expect the gauge of economic activity outside of the manufacturing sector to hold steady at 49.5, unchanged from the month before.
Crude oil inventory data is due out at 10:30. Crude is holding steady ahead of the report, up 44 cents to $109.79 a barrel.  Gold gained $4.20 to $812.20 an ounce.

Among the stocks to watch, Toll Brothers (TOL) and Hovnanian (HOV) shares are trading lower after the two homebuilders posted losses for the most recent quarter. H&R Block (HRB) dropped after the tax preparation company posted a loss of 40 cents for the quarter, which was a nickel worse than analyst estimates. Boeing (BA) will weigh on the Dow in early trading after a machinist union rejected the company's latest offer.
Walmart (WMT) is higher after the retailer kicked off a busy day of retail sales results by reporting a .3 percent increase in same store sales for the month of August. 
In the options market, trading was active Wednesday, with approximately 7.1 million calls and 6.5 million puts traded on the session. Anxiety levels seemed to ease somewhat as trading in the equity market ended on a mixed note. The Dow Jones Industrials overcame a triple digit loss to end 16 points higher. The NASDAQ lost 15.5 points. Meanwhile, after hitting a high of 22.30 early, the CBOE Volatility Index (.VIX) edged lower and finished down .52 to 21.47.  
Lehman Brothers (LEH) helped lift the financials late in the day. Trading in LEH options was defensive throughout most of the session. The stock hit a low of $15.65 Wednesday morning and almost 70,000 LEH puts traded on the day, or roughly double the number of call options. However, shares hit session highs near $17.00 in afternoon trading after a CNBC commentator reported that HSBC (HBC) might be interested in acquiring some or the entire investment bank.

El Paso (EP) call volume surged. More than 134,000 of the October 17s traded on the day. Shares settled the trading session up 28 cents to $15.70 and there was no real news to explain the spike in call volume in EP. Meanwhile, unsubstantiated takeover chatter drove call buying in Timberland (TBL) and Frontier Oil (FTO) early in the trading day. Coach (COH), Ambac (ABK), and Goldcorp (GG) also saw bullish order flow. Meanwhile, defensive or bearish trading was seen in Altera (ALTR), Walgreen's (WAG), and the Select Sector Energy Fund (XLE).

Frederic Ruffy
WhatsTrading.com