Stock Futures Lower Before Jobless Claims and Productivity Data

The US Senate OK’d an extension of the first-time home-buyer tax credit that was to expire at the end of this month. The incentive will now expire six months into 2010. In addition, the program will allow homeowners who have lived in their current home for more than five years to receive a $6,500 tax credit to purchase a new primary residence. READ MORE

The Senate bill also includes an extension of unemployment benefits for states with jobless rates of 8.5% or higher. In those states, individuals will be eligible for an additional 20 weeks of benefits.

On to markets . . . After ending the day with mixed results yesterday, Thursday is set to open with similar sentiment. Equity futures are looking slightly down ahead of the weekly jobless claims report and the quarterly survey of productivity and costs. Both reports should confirm that the economy is experiencing a jobless recovery.

Meanwhile, the US dollar is stronger against an array of currencies but weaker against the yen. Oil is down 46 cents to $79.94, and spot gold is $4 off from record highs at $1,088.

In fixed income, Sal Guatieri from BMO noted that the 2-year Treasury yield fell to a one-month low of 88 basis points after Federal Reserve reaffirmed that short-term interest rates are on hold for a long time. 

“Basically, the Fed won’t begin raising rates until the unemployment rate starts to trend down or inflation expectations begin to ratchet up,” he said. “Given our subdued growth outlook, we don’t expect a rate move until September, at the earliest.”

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