A lousy U.S. retail sales report before the opening bell this morning is weighing on the futures and it appears we are going to open lower. The Commerce Department said sales plunged a seasonally adjusted 2.7% in December, which was the six month in a row that retail sales have fallen. The news is not a surprise but the report isn’t as bad as the market will make it sound.

As a result the Dow futures are down 162, the Nasdaq futures are down 24, and the S&P 500 futures are trading lower by 19.60. We could be looking at a triple-digit loss for the Dow right off the bat.

As far as the Dow, a break below 8400 would not be good. The index has been down for five straight days, falling from 9015 to below 8500 during that time frame and today’s anticipated drop could clear the way for a retest of the November lows.

HSBC Holdings (HBC, $45.85, down $0.85) was weak in European trading late last night and was lower by 5% before their market opened. HSBC is a British bank but trades as an American depositary receipt (ADR) on our exchanges as well as other markets. The stock was down 5% in pre-market European trading last night which should be good news for the put options I profiled yesterday.

Rick Rouse