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The snowiest January in six years played havoc with hopes of a strong ending to the holiday season, weighing down shopper traffic in malls and stores, especially in the Northeast, which saw multiple snowstorms.

Fewer discounted goods in a typically promotional month could also have kept bargain-hungry shoppers away, analysts pointed out.

Retailers ranging from Target Corp to Saks Inc report January sales on Thursday. January is the final month and the smallest contributor to sales in the retail sector's fourth quarter.

Sales at stores open at least a year, or same-store sales, are forecast to rise 2.7 percent, compared with a rise of 3.3 percent a year earlier, according to Thomson Reuters data.

"The market is obviously very aware of Mother Nature's negative impact this month, as well as limited clearance levels. As a result, we would not read too much into any January softness," Retail Metrics President Ken Perkins said.

Like others, Perkins sees February as a better indicator of how retailers are faring.

In an early batch of results on Wednesday, mall-based teen apparel chain Hot Topic Inc reported a 3.3 percent fall in January same-store sales, while analysts expected only a 2.8 percent decline. On the other hand, Zumiez beat estimates with a 15.3 percent rise in same-store sales.

U.S. shoppers cut back on shopping in January after opening their wallets during November and December, helping U.S. retailers post their best holiday sales in six years.

Claudia Carrmoma was one of them. After scooping up discounts on clothes in December, she hardly shopped in January. The 38-year old New Jersey resident, who works at a jewelry store in Manhattan, said her spring shopping "depends on the money I make."

"I feel like I should save now," Carrmoma said.

Analysts expect teen chains American Eagle Outfitters Inc, Abercrombie & Fitch Co and Aeropostale Inc -- all three of which face tough comparisons versus last year -- as well as apparel chains such as Gap Inc to report same-store sales declines in January.

Luxury chains, Victoria's Secret parent Limited Brands Inc and warehouse club operator Costco Wholesale Corp are among those expected to do well.

"Despite the headwinds that existed during this month, we believe that recent solid trends at the high end likely continued through January as well, as luxury sales continued to outpace the middle and lower end," Barclays analyst Robert Drbul said.

He sees same-store sales rises for both Nordstrom Inc and Saks Inc.

(Reporting by Dhanya Skariachan; editing by Andre Grenon)

With the onset of long Lunar New Year holidays across much of Asia and a U.S. payrolls report looming Friday, investors took a step back as clashes between Egyptian President Hosni Mubarak's supporters and demonstrators became increasingly violent.

Brent crude oil futures approached $103 a barrel as Mubarak's supporters opened fire on protesters in Cairo in what many saw as an attempted government-backed crackdown on pro-democracy demonstrations.

Fears that unrest in Egypt and Tunisia will spread to other oil-rich countries in the Middle East overshadowed the bearish effect of soaring gasoline inventories in the United States.

Rising fuel and food prices have exacerbated worries that high inflation will force policymakers in Asia and other emerging markets to aggressively tighten policy, putting a dampener on a key driver of the global recovery.

Higher prices for raw materials are already squeezing corporate earnings. U.S. candy maker Hershey Co (HSY.N) reported overnight that it was seeing "meaningfully higher" costs for ingredients such as cocoa and sugar, though productivity gains and cost savings are helping to support its profit margins for now.

"While monetary tightening across Asia and EMs (emerging markets) generally is unlikely to get so aggressive that it crunches growth, it is still likely to worry investors," said Shane Oliver, chief investment strategist at AMP Capital Investors.

The short-term cautious stance on emerging markets is likely to see shares in developed markets such as the U.S. and Northern Europe outperform over the next six months, said Oliver.

Japan's Nikkei .N225 fell 0.2 percent, after posting its biggest jump in two months the day before.

Weighing on the index, shares of Panasonic Corp (6752.T) fell 3.4 percent yen after it posted a worse-than-expected 5.6 percent fall in quarterly profit as tough price competition and a stronger yen offset help from Japan's incentive scheme for eco-friendly appliances.

Overall, foreigners remained net buyers of Japanese stocks for a 13th straight week on optimism that the U.S. and global recoveries were still gathering strength.

"Foreign buying rose if we look at inflows, but it actually fell when we consider number of shares bought, indicating that foreigners have shifted into more expensive, major shares of exporters as hopes for a pickup in the U.S. economy are on the rise," Yamagishi said.

U.S. private employers added more jobs than expected in January, the 12th consecutive month that companies took on staff, adding to hopes that the American labor market is slowly recovering and bolstering hopes for the more comprehensive U.S. jobs report Friday.

In currency markets, the euro eased from a 2-1/2 month high of $1.3860 against the dollar, though traders believed the single currencies' uptrend was still intact given signs of inflation in the euro zone. <FRX/>

Elsewhere in Asia, Australia's main share benchmark .AXJO rose 0.4 percent as strong metals prices continued to support shares of resources firms. Mining giants BHP (BHP.AX) and Rio Tinto (RIO.AX) both rose more than 1 percent as copper prices stayed near $10,000 a ton, with supplies tight against strong demand.

The report cited court documents and people familiar with investigations by state attorneys general in California, Virginia, Florida and Tennessee that it said could reveal more about the $4 trillion-a-day international foreign-exchange market.

An entity called FX Analytics sued Bank of New York Mellon Corp in Fairfax County Circuit Court in Virginia, accusing the bank of overcharging a state pension fund in converting currencies for its securities trading.

The lawsuit seeking $150 million in damages, was filed in 2009 and taken over by Virginia state prosecutors last month, the Wall Street Journal reported.

A spokesman for the bank could not immediately be reached outside of business hours in New York.

The WSJ report quoted a statement by the bank as saying: "We believe the lawsuit is without merit and we intend to defend it vigorously."

Another lawsuit involves State Street Corp, which was sued in California by an entity called Associates Against FX Insider Trading. The state attorney general sued State Street in 2008 and 2009.

The lawsuit alleged that the Boston-based firm "raided" the custodial accounts of California's two largest public pension funds in excess of $56 million by fraudulently pricing foreign currency trades.

A spokeswoman for the bank could not immediately be reached outside of business hours in Boston. The WSJ quoted a State Street statement as saying the firm believed its "FX services are consistent with our contractual obligations with the California state entities, and we are defending ourselves against the charges made in the complaint."

The whistleblowers, who are using Delaware shell companies to remain anonymous, may have worked at State Street and Bank of New York Mellon, the report said. It identified one of the whistleblowers as Harry Markopolos, a Boston-based investor who for years warned regulators about epic swindler Bernard Madoff, but no action was taken against him until his firm collapsed in December 2008.

The Wall Street Journal said prosecutors were looking into whether banks charged state pension funds the most expensive foreign-exchange price during the day when a trade took place, rather than the rate the bank paid, and when currencies were sold, paid them the lowest price for the day.

(Editing by Lincoln Feast)

Investors were reluctant to make big bets even though a report showed U.S. private employers added more jobs than expected in January.

The S&P 500 started to look overbought again after reaching 2 1/2-year highs on Tuesday. A key measure of the rally's strength suggests stocks are vulnerable to a correction, analysts said.

The PHLX Semiconductor Index .SOX was running into resistance around 450 after back-to-back closes above that level for the first time since November 2007. Chips are considered a leading indicator for the broader market.

"If the market looks like it's ready for a 5 percent or more correction, what's one of the sectors at the top of my list to be out of? For sure it's the semiconductors," said Vinny Catalano, chief investment strategist at Blue Marble Research in New York.

The Dow closed on Tuesday above the milestone 12,000 level for the first time since June 2008, and the S&P closed above the 1,300 level for the first time since August 2008.

Investors on Wednesday kept an eye on protests in Egypt as violent street clashes erupted. Concerns that protests could spread to other countries in the region have pressured equities in recent sessions.

The Market Vectors Egypt Index ETF (EGPT.P), which consists of shares of companies in Egypt, fell 3.7 percent after rising for two consecutive days.

The Dow Jones industrial average .DJI rose 1.81 points, or 0.02 percent, at 12,041.97. The Standard & Poor's 500 Index .SPX was down 3.56 points, or 0.27 percent, at 1,304.03. The Nasdaq Composite Index .IXIC was down 1.63 points, or 0.06 percent, at 2,749.56.

Joseph Hargett, a strategist at Schaeffer's Investment Research, said the Dow needs to stay above 12,000 firmly as a show of short-term support. "The resistance now resides in the 12,100-12,200 area."

After a pullback late last week, the S&P 500 has started to look overbought by some measures. The index is more than one standard deviation above its 50-day moving average and the weekly relative strength index is above 70.

Trading volumes were not seriously affected by a harsh winter storm that brought parts of the U.S. Midwest to a standstill.

The story was different for futures traders in Chicago, which took much of the brunt of the storm.

"It's definitely light downtown here. Pit trading opened late too. ... We're about half-staffed," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago, where over 20 inches of snow had fallen.

Volume on the NYSE, Amex and Nasdaq reached 7.26 billion shares compared to last year's daily average of about 8.47 billion.

But the days of outsize returns on low expenses appear to be ending for Visa, the world's largest credit and debit card processing network. It failed to beat expectations by as much as investors have come to expect, and it has yet to fully assuage investor concerns about how it will cope with new U.S. regulations that may reduce future revenue.

Shares fell about 1 percent in after-hours trading, after closing 2 percent higher at $72.09.

Visa said it expects operating margins to remain around 60 percent for 2011, in what investors said signaled a shift from its earlier days of high revenues and relatively low expenses.

"This quarter is a pretty clear view of the transition that's going on within the business for Visa and most likely for MasterCard," said Jim Tierney, chief investment officer of money management firm W.P. Stewart.

"The business is settling down into a really nice healthy fundamental growth rate that's coming from revenue growth and free cash flow usage instead of operating margin expansion," said Tierney, whose firm owns shares of MasterCard Inc (MA.N) and has owned Visa shares in the past.

He called Visa shares relatively cheap versus historical levels, and said they would be "nicely accretive over time." The are trading at about 14 times 2011 full-year earnings, he said, versus the 20 to 30 times full-year earnings they have traded at in the past.

Total operating expenses rose 17 percent in Visa's fiscal first quarter, ended December 31, from a year earlier to $872 million, while total revenue rose 14 percent from a year earlier to $2.2 billion, in line with expectations. Personnel expenses rose from a year earlier, while Visa spent less on network and processing and on marketing.

"They're firing on all cylinders," said Intrepid Ventures payment consultant Eric Grover. "Everything was positive other than on the regulatory front."

REASSURING ON REGULATION

Visa and MasterCard are facing increased regulation under the U.S. Dodd-Frank financial reform law, which will restrict the fees that merchants pay banks and networks for processing debit card transactions.

Visa's shares fell more than 12 percent in December after the Federal Reserve proposed a 75 percent cut in debit card processing fees, and have not fully recovered since.

The rules are expected to cost the debit card industry some $13 billion of an estimated $23 billion of annual debit card processing fee revenue. Visa and MasterCard are making a furious last-ditch effort in Washington to blunt the law's impact, but industry experts say that effort is likely too little, too late.

Chief Executive Joseph Saunders was undaunted on Wednesday, calling for a "thorough review and revision" of the rules.

"We believe Congress should re-examine the (provision of the Dodd-Frank law) and delay implementation to more carefully consider the complexities and unintended consequences of the provisions," he told investors and analysts during a conference call.

But shares fell about 1.4 percent in after-hours trading, as the company failed to post the outsize profits investors have come to expect. Visa also has yet to address investor fears about how it will cope with looming U.S. regulation.

"It was a good quarter, not a great quarter, in terms of beating expectation and clearly there are more issues at stake," said Signal Hill analyst Mayank Tandon. "The market will be looking for some clarity of how they plan to mitigate the impact" of regulation.

The U.S. Dodd-Frank financial reform law will restrict the fees that merchants pay banks and networks for processing debit card transactions. Visa's shares fell over 12 percent in December, after the Federal Reserve proposed a 75 percent cut to debit card processing fees, and have not fully recovered since.

The world's largest credit and debit card processing network reported a profit of $1.23 per share for its fiscal first quarter, ended December 31.

That compared with a year-ago profit of $763 million or $1.02 per share.

Analysts on average had expected Visa to earn $1.21 per share, according to Thomson Reuters I/B/E/S.

Visa shares closed up about 2 percent at $72.09 on Wednesday.

(Reporting by Maria Aspan; Editing by Steve Orlofsky)

U.S. private employers added 187,000 jobs in January, more than forecast, according to a report from ADP Employer Services.

"This suggests that the jobs momentum is going the right way, and it makes me more optimistic for Friday's payroll report. But it isn't such a blow-out number to allow us to add to gains," said Michael Yoshikami, president and chief investment strategist at YCMNET Advisors in Walnut Creek, California.

S&P 500 futures dropped 2 points and were above 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 were off 11 points, and Nasdaq 100 futures fell 2.75 points.

Appliance maker Whirlpool Corp dropped 4.9 percent to $81.20 before the bell after its profit missed expectations.

Time Warner Inc rose 3.2 percent to $33.35 premarket after its profit topped estimates on a 21 percent jump in advertising sales at its cable networks.

Mattel Inc rose 1.4 percent to $24.49 premarket after its profit beat expectations on strong demand for its Barbie and American Girl dolls.

On Tuesday, the Dow and S&P 500 closed at their highest levels since June 2008 after strong earnings and signs of a surge in U.S. manufacturing. The Nasdaq surged almost 2 percent.

(Editing by Jeffrey Benkoe)

The December figure was originally reported as a gain of 297,000 jobs.

The median of estimates from 29 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 145,000 private-sector jobs in January.

The ADP figures come ahead of the U.S. government's much more comprehensive labor market report on Friday, which includes both public and private sector employment.

That report is expected to show a rise in overall nonfarm payrolls of 145,000 in January, based on a Reuters poll of analysts, but a rise in private payrolls of 155,000.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

(Reporting by Caroline Valetkevitch; Editing by Padraic Cassidy)

Oil prices, however, continued to climb on worries that unrest in Egypt would trigger regime change across the Middle East and North Africa, driving North Sea Brent crude futures toward a 28-month high.

The dollar fell to three-month lows against a basket of major currencies as the three factors took the steam out of safe-haven buying in the greenback.

MSCI's all-country world stock index, one of the broadest gauges of global equities, was up 0.5 percent having hit levels last seen in August 2008.

Its developed market counterpart gained 0.5 percent to come close to a high last seen in early September 2008.

Emerging markets were up 0.8 percent on the day, but remain down more than 1 percent for the year, reflecting a recent shift by investors from emerging to developed markets.

Stock investors were cheered on Tuesday by strong factory data worldwide, which pushed U.S. benchmark stock indexes to their highest closing levels since June 2008.

Strong earnings from delivery firm UPS Inc and drugmaker Pfizer added to the mood.

"The world economy appears to be improving a little faster than expected, valuations are ok and companies are publishing quite good results," Geert Ruysschaert, strategist at BNP Paribas Fortis Private Banking, said. "So investors can take advantage of that."

The pan-European FTSEurofirst 300 was up 0.4 percent for a near 4 percent year-to-date gain. Earlier, Japan's benchmark Nikkei ended up 1.8 percent for its biggest daily gain since December 2.

Concerns about the political crisis in Egypt, meanwhile, were easing on financial markets after President Hosni Mubarak said he will step down at the end of his term in September, even though protestors continue to demand an immediate end to his 30-year rule.

Foreign investors have begun to show renewed interest in Egyptian bonds and stocks and the cost of insuring Egyptian debt against default fell.

DOLLAR AT LOWS

The dollar was at 12-week lows with expectations of loose U.S. monetary policy further encouraging risk-taking and as concerns over euro zone peripheral debt seemed to be contained.

"The dollar is weak due to the huge U.S. deficit, no yield and a very dovish central bank," said Ray Farris, currency strategist at Credit Suisse.

Panasonic, the world's fourth-largest TV maker after Samsung Electronics, LG Electronics and Sony Corp, is struggling to catch up in smartphones and tablets, a market dominated by Apple Inc and with Samsung emerging as a key rival.

Investors are eyeing Panasonic's ability to restructure quickly and show benefits after its deal with Sanyo Electric, which is aimed at sharpening the company's focus on environmental technologies like solar power systems and rechargeable batteries.

The company is expected to provide an update on integration plans later this year.

Panasonic reported an operating profit of 95.36 billion yen ($1.17 billion) for October-December, lagging the average forecast of 109.1 billion yen from a poll of six analysts by Thomson Reuters I/B/E/S.

The maker of Viera TVs and Lumix cameras left its full-year profit outlook at 310 billion yen, compared with a consensus of 328 billion yen in a poll of 20 analysts. Operating profit for the year to March 2010 was 190 billion yen.

Panasonic shares have fallen nearly 30 percent from a 14-month high of 1,585 yen reached in January last year, compared with a 5 percent fall in the Nikkei average.

(Reporting by Isabel Reynolds; Editing by Michael Watson)