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By Denise Duclaux

NEW YORK (Reuters) - Wall Street girded for a sell-off at Thursday's open as disappointing outlooks from technology bellwethers International Business Machines Corp. <IBM.N> and Nokia <NOK.N> raised doubts about the rebound that investors had been betting on for the last four months.

A pair of economic reports before the open nudged equity futures up from their lows. The number of Americans filing new jobless claims fell a sharp 29,000 last week, the government said. Other data showed that U.S. homebuilders kept busy in June, breaking ground on new homes at the fastest pace since January.

"The market is down due to concerns over earnings, but overall these numbers (in the reports) should add support to the market," said Phil Flynn, vice president and senior market analyst at Alaron Trading Corp.

Equity futures indicated a sharply lower open on Wall Street. Standard & Poor's 500 futures for September skidded 8.4 points to 986.70 and Nasdaq futures for the same month sank 20 points to 1,275. Dow Jones industrial futures lost 68 points to 9,020.

IBM met expectations for earnings after Wednesday's close but did not top them. IBM's chief financial officer said he expects IBM to meet 2003 estimates, but he described technology demand as "good, but not robust."

He stopped short of predicting a recovery in the three-year information technology spending slump, saying such second-half rebounds had been expected in 2001 and again in 2002. IBM fell to $83.77 in pre-open trade from Wednesday's close of $86.74.

Nokia <NOK1V.HE>, the world's top cellphone maker, added a sour note and tossed European markets lower when it posted weaker second-quarter earnings and warned that a soft dollar would whack sales and profits at its main handset unit. Nokia skidded to $15.05 in U.S. pre-open trading after closing at $17.95.

With stocks surging off March 11 lows, Wall Street had been betting on a second-half rebound in corporate profits and the U.S. economy and was looking for confirmation out of corporate America at the height of the second-quarter earnings seasons.

The Federal Reserve Bank of Philadelphia's July manufacturing business outlook survey -- expected to read 7.0, up from 4.0 in June -- is due at 12:00 p.m. (With additional reporting by Doris Frankel)



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