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US STOCKS-Wall St set to open flat, near record levels

Ryan Vlastelica
Thursday, 31 Oct 2013 | 8:56 AM ET

* Investors focus on Fed comments, indexes near highs

* Facebook rises in premarket, trading could be volatile

* Jobless claims fall slightly less than expected

* Futures: Dow up 1 pt, S&P down 1.4 pt, Nasdaq down 13 pts

NEW YORK, Oct 31 (Reuters) - U.S. stock index futures pointed to a flat open on Thursday, as some strong corporate earnings gave investors a reason to buy, though they remained cautious, with indexes near record levels, as they digested recent comments from the Federal Reserve.

Optimism about earnings was boosted by Exxon Mobil Corp , one of the largest U.S. companies by market cap, which reported adjusted third-quarter earnings that beat expectations, sending shares 0.8 percent higher to $89.53 in premarket trading.

Facebook Inc and Expedia were also stronger on the day, though general concerns remained about the pace of revenue growth this quarter.

The Fed said Wednesday it had a weaker growth outlook for the U.S. economy, though it held its stimulus program steady for now, as expected. The comments sparked an equity market decline, with the S&P 500 snapping a four-day streak of gains.

"The market is a little soggy today. Some investors are viewing yesterday's statement as more hawkish than they would have liked," said John Brady, managing director at R.J. O'Brien & Associates in Chicago. Still, "I'm not concerned about the level of the market, since so long as the Fed is pumping liquidity in, I'm not sure where else there is to go."

The Fed's stimulus has fueled the market's gains this year, boosting the S&P by more than 23 percent so far in 2013 to hit a series of record highs. However, that advance has come amid weaker-than-expected economic data and an earnings season marked by weak revenue, leading many analysts to expect a pullback.

S&P 500 futures fell 1.4 point but remained 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 rose 1 point and Nasdaq 100 futures lost 13 points.

The Dow has gained 3.2 percent in October, while the S&P has added 4.9 percent and the Nasdaq is up 4.2 percent.

In a pronounced consolidation, the S&P could find support at its 14-day moving average of 1,740.39, which is 1.3 percent below its current level.

Facebook Inc rose 3.4 percent to $50.70 in premarket trading, after reporting strong growth in its mobile advertising business late Wednesday. Trading could be volatile as the company said it didn't plan to boost the frequency of ads shown to users, comments that erased the social networking giant's steep gains after the market closed Wednesday.

Expedia Inc soared 19 percent to $59.40 a day after reporting third-quarter earnings that beat expectations, while Starbucks Corp dipped 1.6 percent to $79.50 in light premarket trading a day after giving a disappointing outlook.

Of 313 companies in the S&P 500 that reported earnings through Wednesday morning, 68.4 percent topped Wall Street expectations, above the 63 percent beat rate since 1994 and the 66 percent rate for the past four quarters, according to Thomson Reuters data. Only 53.7 percent of companies have topped revenue expectations, well below the 61 percent average since 2002.

In the latest economic data, jobless claims fell by 10,000 to 340,000 in the latest week. Economists had expected 339,000 new claims. Futures were little impacted by the data.

According to two sources familiar with the matter, US Airways Group and American Airlines are considering giving up takeoff and landing slots at Washington's Ronald Reagan National Airport to win regulator approval of their $11 billion merger.

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