Stock futures fall after foiled UK airline plot (Reuters)

[News Desk]

NEW YORK (Reuters) - Stock futures pointed to a weaker market open on Thursday after British police foiled a plot to blow up aircraft mid-flight between Britain and the United States.

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Before the opening bell, shares of Continental Airlines (NYSE:CAL - news) fell 3.1 percent to $23.46 in light trading on the Inet electronic brokerage while in Europe major carriers' shares dropped about 4 percent.

"We're headed for a lower opening and that's due to this terrorist plot," said Peter Cardillo, chief market analyst and chief strategist at SW Bach and Co. in New York. "This once again brings up the terrorism concern, and raises the level of fear in the markets."

In an unprecedented move, the U.S. government raised the threat level for commercial flights originating in Britain to "severe," the highest U.S. threat level.

"It's going to obviously be negative for transportation stocks and perhaps some other sectors could benefit such as metals in some flight to quality issues," Cardillo said. Shares of gold miners could rise since gold is seen as a safe-haven investment during times of geopolitical risk.

Standard & Poor's 500 futures were down 7.1 points, below fair value, a mathematical formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures were down 47 points, and Nasdaq 100 futures were down 8 points.

Britain's FTSE 100 index (^FTSE - news) fell 1.2 percent.

British police said they were holding 21 people in connection with a thwarted plot to blow up passenger planes flying between Britain and the United States and cause "mass murder on an unimaginable scale."

Airlines canceled hundreds of flights in and out of London.

In other trade before the bell, shares of ImClone Systems Inc. (Nasdaq:IMCL - news) shed 8.6 percent to $29.58 after the company said its board of directors completed a review of its strategic alternatives and the company decided to remain independent.

Insurer American International Group (NYSE:AIG - news) may come under pressure after the Dow component said its earnings fell 29 percent.

Retailers will report earnings, including JC Penney Co. Inc. (NYSE:JCP - news), Kohl's Corp. (NYSE:KSS - news) and Target Corp. (NYSE:TGT - news).

The Labor Department will report on initial unemployment insurance claims for the latest week while the Commerce Department will release figures on U.S. international trade for June. Both are due at 8:30 a.m. (1230 GMT).

Initial claims are forecast to remain steady from the previous week at 315,000. The June trade deficit is forecast to widen to $64.40 billion from $63.84 billion in May.

[Kristie]

definatly not a good thing for the airlines that are still restructuring!! of course, it would have been much worse had the plot been carried out.