US STOCKS-Wall St to open lower with ISM data on tap

Thu Jan 2, 2014 9:15am EST

* Initial claims decline slightly

* Markit manufacturing increases

* Futures off: Dow 40 pts, S&P 4.6 pts, Nasdaq 10.75 pts

By Chuck Mikolajczak

NEW YORK, Jan 2 (Reuters) - U.S. stocks were poised for a lower open on Thursday, after the S&P 500 wrapped up its best year since 1997, as investors digested data on manufacturing and the labor market.

The S&P 500 closed out 2013 with a spectacular 29.6 percent gain for the year - its best annual performance since 1997, adding $3.75 trillion in market value. The Dow climbed 26.5 percent in its best year since 1995. The Nasdaq jumped 38.3 percent, its best year since 2009.

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 339,000, the second weekly decline in a row, suggesting labor market conditions continue to steadily improve.

In another sign of economic improvement, financial data firm Markit said its final U.S. Manufacturing Purchasing Managers Index rose to 55.0 last month, beating November's 54.7 reading and an initial December estimate of 54.4.

"Investors are going to take a deep breath and try to assess a new set of data for the year, that may mean waiting until we see employment data next week," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

"Some of (the decline) is natural profit-taking for tax purposes, move your gains into the following tax year."

Later in the session at 10:00 a.m. (1500 GMT), the Institute for Supply Management's manufacturing index will be released. The ISM index is expected to show a reading of 57 versus the prior reading of 57.3.

In China, official and private manufacturing surveys showed factory activity slowed in December in the world's second-largest economy, reinforcing views China's economy moderated in the last quarter of 2013.

Separately, Markit's Eurozone Manufacturing Purchasing Managers Index (PMI) rose to 52.7 in December from November's 51.6, its fastest rate since mid-2011 in December, on brisk business in Germany and Italy.

S&P 500 futures fell 4.6 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 lost 40 points and Nasdaq 100 futures declined 10.75 points.

Volume is once again expected to be on the light side, as many market participants remain out of the office due to the New Year's holiday-interrupted week.

Apple Inc dipped 1 percent to $555.30 in premarket trading. Wells Fargo cut its rating on the iPad maker to "market perform" from "outperform."

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