Housing reports dampen Wall St.

At 8:49 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq futures were all lower.

Futures measure current index values against perceived future performance and offer an indication of how markets will open when trading begins in New York.

"I think the market already knows that we're not going to see recovery until the latter part of the year, so the numbers are going to remain ugly," said Peter Cardillo, chief market economist for Avalon Partners, before the government released its reports on housing and job markets.

"Declines in Chinese growth could further impact the global economy," Cardillo added, referring to the fourth-quarter slump in Chinese economic growth to a seven-year low.

The dour premarket follows a rally on Wednesday, when the Dow Jones industrial average rose 3.5%, the Nasdaq rose 4.4% and the Nasdaq composite jumped 4.6%.

Quarterly results will dominate the markets, said Anthony Conroy, head trader at BNY Brokerage.

"Earnings are pretty much the spotlight of the day, and it looks like more bad news than good news," said Conroy. "[For] any company that is super-dependent on consumer spending, it looks like they're going to get hit hard."

Economy: The Labor Department reported that 589,000 out of work employees filed for jobless claims in the week ended Jan. 17. That is worse than the 548,000 claims that were expected, according to a consensus of economists surveyed by Briefing.com.

The government also reported a sharp drop in housing starts and permits to annual rates of 549,000 building permits and 550,000 housing starts in December. That was worse than the annual rate of 615,000 permits and 610,000 starts that were expected by a consensus of economists surveyed by Briefing.com.

The 15.5% plunge in housing starts brought them to the lowest level since record keeping began in 1959.

These reports on the housing and job markets - among the weakest sectors of the economy - are closely watched by investors.

Those readings are followed by the Energy Department's weekly report on U.S. fuel inventories, scheduled for release at 11 a.m. ET.

China: In a sign that the recession is being felt all over the world, the Chinese government reported that economic growth slowed to an annual rate of 6.8% in the final quarter of 2008. That was slightly below expectations of 7%, and brought the growth for all of last year to a seven-year low of 9%.

Apple: Despite a tough environment for tech sales, the maker of the iPod and Macintosh computers reported quarterly earnings that topped Wall Street's expectations.

Apple's (AAPL, Fortune 500) results come on the heels of IBM's solid quarterly earnings, which helped propel U.S. markets Wednesday. The shares were up 8% in pre-market trading.

The earnings were in contrast to the Japanese electronics maker Sony (SNE), which warned that it would report its biggest loss ever - a $2.9 billion operating loss for the fiscal year ending in March. The loss was partly due to restructuring costs, and partly because of the stronger yen, the company said.

Finland-based cell phone maker Nokia (NOK) also reported a quarterly loss of nearly $750 million.

Banks: Investors may also be eyeing beaten-down bank shares. A recovery in bank shares lifted world markets Thursday, with shares in Asia and Europe making broad advances.

But the Cincinnati-based regional bank Fifth Third (FITB, Fortune 500) reported a net loss of $2.2 billion as it wrote down its banking business.

KeyCorp (KEY, Fortune 500) also reported a loss of more than $500 million from continuing operations.

Money and oil: The dollar slipped against the yen but rose versus the euro and the British pound. Oil prices fell 43 cents a barrel to $43.12.