US Stock Futures Lower On China Inflation Worries





U.S. stock futures slipped Thursday on worries that China, the engine of the world economy, may have to slam the brakes to combat accelerating prices.

S&P 500 futures fell 2.2 points to 1143.50 and Nasdaq 100 futures lost 2.5 points to 1916.20. Futures on the Dow Jones Industrial Average sank 14 points.

U.S. stocks edged higher Wednesday, with government-backed financials American International Group Inc. (AIG) and Citigroup Inc. (C) extending gains, and technology companies also performing well. The blue chip Dow Jones Industrial Average rose fractionally but the S&P 500 gained 0.5% and the Nasdaq Composite rose 0.8%.

Driven by a jump in food prices, Chinese CPI climbed 2.7% in February. Lending by Chinese banks rose 700.1 billion yuan ($102.5 billion) in February, while money supply as measured by M2 was up 25.5%.

"Today's monetary and inflation data out of China do not make for comfortable reading," said Diana Choyleva, of Lombard Street Research.

"Given the force of the monetary expansion, it is highly likely that the People's Bank of China will have to tighten too much because it left it too late."

The Shanghai Composite finished the session up 0.1%, and most Europe indexes saw modest losses.

In the U.S., the data calendar features weekly jobless claims and January trade data.

The British pound recaptured the $1.50 level, and in energy, crude-oil futures traded over $82 a barrel.

Devon Energy Corp. (DVN) rose nearly 3% in the premarket after agreeing to sell Brazil, Gulf of Mexico and Azerbaijan assets to BP PLC (BP) for $7 billion and buying half of a BP oil sands project in Canada for $500 million. BP drifted lower in London trade.

Meanwhile, Exxon Mobil Corp. (XOM) will be holding its annual meeting. Exxon may outline its capital spending and stock buyback plan, analysts say.

Outside of the oil space, the International Air Transport Association halved its loss forecast for the global airlines industry in 2010 to $2.8 billion, from a December prediction of $5.6 billion, citing a much stronger-than-expected recovery in demand since the start of the year, particularly in Asia Pacific and Latin America.

-By Steve Goldstein;44 2078 429 424; AskNewswires@dowjones.com

Among the companies whose shares are expected to actively trade in Thursday's session are Men's Wearhouse Inc. (MW), Hot Topic Inc. (HOTT) and Clean Energy Fuels Corp. (CLNE).

Men's Wearhouse swung to a fiscal fourth-quarter loss on a write-down and lower sales and margins. The suit and apparel retailer has struggled alongside other clothiers throughout the recession, forced to cut prices--and margins--to keep traffic. However, same-store sales declines have started to slow. Shares fell 5.8% to $23.40 in late trading.

Hot Topic's fiscal fourth-quarter profit slid 44% on continued sales weakness and falling margins. The teen retailer also projected a first-quarter loss of 2 cents to 5 cents, including 2 cents a share in expenses related to the company's online music site, and based on a high single-digit decline in same-store sales. Analysts expected a 2-cent loss. Shares dropped 4.9% to $6.23 after hours.

Clean Energy's fourth-quarter loss narrowed sharply as demand for alternative fuels helped the company buck weak economic trends. Shares were up 3% to $19.89 in after-hours trading as results topped analysts' expectations.

Investors' enthusiastic reception for Citigroup Inc.'s (C) sale of $2 billion of trust preferred securities Wednesday takes the once-tottering bank another step closer to repairing its balance sheet and repaying taxpayers. But it has many more steps ahead. Shares rose 1.8% to $3.96 premarket.

U.K. oil major BP PLC (BP) Thursday said it bought into a diverse and broad deepwater exploration portfolio offshore Brazil, Azerbaijan and the U.S in a $7 billion deal with U.S. independent oil and gas producer Devon Energy Corp. (DVN). Devon's shares rose 3.2% to $73.99 premarket.

Gymboree Corp.'s (GYMB) fiscal fourth-quarter profit grew 13% as the children's apparel maker posted higher sales and margins. Shares gained 5.6% to $48.90 in after-hours trading as the earnings topped the company's February projection.

Clarient Inc.'s (CLRT) fourth-quarter loss widened as revenue growth was offset by higher expenses for the developer of cancer diagnostics. Saying it began 2010 with solid commercial and operating momentum, the company said it expects to report annual revenue of $108 million to $115 million and a bottom line in the black, in line with the $113 million and six cents a share Wall Street is projecting. Shares fell 7.2% to $2.31 in late trading.

Semtech Corp.'s (SMTC) fiscal fourth-quarter profit climbed 51% on double-digit sales growth and higher margins. Shares gained 5.1% to $18.24 in after-hours trading as the semiconductor maker's revenue topped its forecast and it projected first-quarter results far above Wall Street's expectations.

FuelCell Energy Inc.'s (FCEL) loss narrowed for the fourth quarter in a row on sales of higher-margin products and cost-cutting. Shares climbed 3.4% to $3.05 as fiscal first-quarter earnings for the maker of fuel cells as power sources met Wall Street's expectations, though its revenue fell far short of analysts' estimate.

Cinemark Holdings Inc. (CNK) said it plans to convert 700 to 900 screens to 3-D technology by the end of this year, then begin making all its theaters worldwide digital. Shares fell 3.6% to $17.50 in after-hours trading.

Hill International Inc.'s (HIL) fourth-quarter earnings more than doubled as reimbursable-expenses-growth revenue overcame a decline in consulting fees. Shares grew 2.8% to $6.28 in after-hours trading as the company's revenue growth easily topped Wall Street's expectations.

Jo-Ann Stores Inc.'s (JAS) fiscal fourth-quarter profit jumped 82%, again on improved sales in the company's sewing and craft businesses and higher margins. For the new year, the fabric and craft retailer projected earnings of $2.75 to $2.90 a share, compared with Wall Street's view of $2.85. Postmarket, shares dropped 1.3% to $39.50.

Providence Service Corp. (PRSC) swung to a fourth-quarter profit as the social-services provider and manager continued to benefit from increased Medicaid enrollments and shed a big charge that hurt the previous period's results. Shares slid 2.6% to $14.22 after hours.