Stocks are set to open lower Thursday as traders express disappointment over earnings news from Yahoo.

Despite strong second-quarter gains, the Internet company didn’t beat Wall Street estimates and only slightly upgraded its 2004 outlook. The announcement came after the close of regular trading Wednesday.

In this morning’s economic news, U.S. initial jobless claims dropped last week to the lowest level in more than three years.

The Labor Department reported today that new applications for unemployment insurance plunged by a seasonally adjusted 39,000 to 310,000 for the week ending July 3. That marked the best showing since Oct. 8, 2000. Economists were forecasting claims to decline to around 345,000.

Meanwhile, big U.S. retailers reported mixed sales in June. Sales at Wal-Mart were disappointing, while J.C. Penney Co. Inc. and Limited Brands were among the merchants whose sales reports for June met or beat analyst expectations.

There are no major economic releases from Statistics Canada today.

In business news, Kenneth Lay, the founder and former chairman and CEO of Enron Corp., turned himself in to the FBI Thursday morning to face criminal charges that stemmed from a nearly three-year federal investigation of the scandal-ridden energy company.

Lay was indicted Wednesday by a federal grand jury in Houston, almost three years after the energy company collapsed in an accounting scandal.

Details of the sealed indictment are expected to be revealed Thursday. Charges could include fraud, securities fraud and insider trading.

Asian markets closed lower, with Tokyo and Hong Kong investors selling select blue chip stocks.

In Japan, the Nikkei dipped 62.63 points to 11,322.23. That’s the index’s lowest close since it was at 11,128.05 on June 4.

In Hong Kong, the Hang Seng plummeted 200.51 points, or 1.6%, to 12,119.75.

Toronto’s S&P/TSX composite index was the sole loser among North America’s major markets Wednesday. The index fell 2.8 points to 8,481.94. The junior S&P/TSX Venture composite index fared slightly better, increasing by 5.93 points to 1,567.83.

In the U.S., the Dow Jones industrial average closed up 20.95 at 10,240.29. The S&P 500 ended up 2.12 points at 1,118.33. The tech-heavy Nasdaq composite index rose 2.65 points to finish at 1,966.08.