Stock futures drop after rally as investors book profit

NEW YORK (Reuters) - Stock futures edged lower on Thursday, as investors locked in gains following a rally on Wednesday, which was spurred by a deal by U.S. lawmakers to avert a "fiscal cliff" of austerity measures that had been due to kick in this year.

Wall Street began the new year Wednesday with a rally and their best performance in more than a year, sparked by a last-minute deal in Washington to avert a fiscal cliff of automatic massive tax hikes and spending cuts that, in the worst-case scenario, would have hurt the nation's economic growth.

"We are looking at a lower open which is normal after a surge like yesterday. I don't think the rally will be cut short," considering the euphoria in the market, said Peter Cardillo, chief market analyst for Rockwell Global Capital in New York.

"What happens in the next few days in the market will set the stage for the remainder of the year."

At 8:30 a.m. EST (1330 GMT), the Labor Department releases first-time claims for jobless benefits for the week ended December 29. In the previous week, there were 350,000 new filings.

Just ahead of that, Automatic Data Processing (ADP) releases its employment report at 8:15 a.m. EST (1315 GMT). Economists in a Reuters survey expect 133,000 jobs were created in December, against 118,000 new jobs in the previous month.

The minutes of the Federal Reserve's policy meeting last month will be released at 2:00 p.m. EST (1900 GMT). The minutes will give details on the discussions of the Federal Open Market Committee's December 11-12 meeting.

S&P 500 futures fell 4 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 20 points, and Nasdaq 100 futures fell 4.75 points.

U.S. retailer Costco Wholesale Corp reported a better-than-expected 9 percent rise in December sales at stores open at least a year, mainly helped by an additional sales day in the reporting period. Costco shares were flat in premarket trading.

Gap Inc will buy women's fashion boutique Intermix Inc for $130 million to enter the luxury clothes market, the Wall Street Journal reported.

Family Dollar Stores Inc reported a lower-than-expected quarterly profit as its emphasis on selling more everyday items like cigarettes and soft drinks put pressure on margins. The stock fell 4.9 percent to $60.90 in premarket trading.

Growth in China's increasingly important services sector accelerated in December at its fastest pace in four months, adding to signs of a modest year-end revival in the world's second-largest economy.

European shares <.fteu3> rose 0.2 percent on Thursday, with Next among the top advancers after the British retailer nudged up its full-year profit forecast.

(Editing by Bernadette Baum)

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