Stocks seen opening down, eyes on subprime woes

FRANKFURT (Reuters) - Shares looked set to open lower on Thursday, with the focus on the fallout in credit markets from the supprime mortgage market meltdown affecting financial stocks in particular, analysts said.

The indicative Dow Jones index .DJII, which measures the Dow stocks as they are traded in Frankfurt, was 0.2 percent lower at 5:30 a.m. EDT.

U.S. equity index futures pointed to falls of between 0.3 percent and 0.4 percent for the Dow Jones .DJI, the S&P 500 .SPX and the Nasdaq .IXIC, which rallied in late trading to close clearly higher on Wednesday. (For more, click on .N)

Some traders in London said, however, that the turnaround may have been the result of inadvertent index futures trades.

"Credit market gyrations still hold centre-stage, and volatility is king," Goldman Sachs said. The CBOE volatility index .VIX hit a four-year high on Wednesday.

"It is evident that losses or at least much reduced profits are going to be reported by a range of financial institutions over Q2 and Q3. And that credit is being tightened across the board. The equity market will thus remain on tenterhooks," Goldman Sachs said.

On Wednesday, shares in Prudential Financial Inc (PRU.N), the second largest U.S. life insurer, slid $1.50 to $86.50 in aftermarket trading as investors worried about the quality of the group's earnings.

Prudential said earnings nearly doubled in the second quarter, helped by an 11 percent gain in net investment income, and raised its outlook for the full year.

Fears of exposure to risky subprime loans drove many U.S. insurers' shares down, including American International Group Inc (AIG.N), which lost 6 percent early in the day before recovering to close slightly higher.

Specialty insurer Assurant Inc. (AIZ.N) is among S&P 500 companies due to report quarterly results on Thursday. Its earnings per share are seen up almost 10 percent year-on-year at $1.26, according to Reuters Estimates.

Outside the financial industry, results are due from media conglomerate Viacom (VIAb.N), Cheasepeak Energy Corp (CHK.N), Newmont Mining (NEM.N) and Intl. Paper Co (IP.N), among others.

After Wednesday's closing bell, shares of Getty Images Inc. GYI.N fell 10 percent after the digital image provider lowered its full-year profit estimates, pressured by competition from discount providers of stock photography.

Video game publisher Electronic Arts Inc. (ERTS.O) shares fell 1.7 percent after the company posted a quarterly loss.

On the U.S. economic data front, weekly claims for jobless benefits for the week ended July 28 are due at 8:30 a.m. EDT and June factory orders at 10:00 a.m. EDT.