Markets are in wait-and-see mode ahead of Friday's jobs report, but there are a few events Thursday that could sway the market's direction.
One is the European Central Bank's policy meeting Thursday morning; traders expect markets to be volatile around it. A fresh batch of earnings reports is also due, including General Motors, while continued spillover from Wednesday's reports will also be a factor after concerns about Twitter's growth slammed its stock and weighed on its social media rivals. Disney, however, had positive results which saw the Dow component's stock up over 3.5 percent after the bell.
There will also be continued fallout from Coca-Cola's surprise acquisition of a 10 percent stake in Green Mountain Coffee Roasters and 10-year agreement to develop a Keurig Cold at home beverage system. That triggered a 43 percent jump in Green Mountain, squeezing some high-profile shorts and is likely to result in more collateral damage. At the same time, shares of Soda Stream plunged on concerns the Coke venture will threaten sales of its at–home soda system.
Traders are also watching for continued action in hot sectors – biotech and 3-D printing in particular. 3-D printer stocks slumped on Wednesday after 3D Systems cut its 2014 outlook. The biotech iShares Nasdaq Biotech ETF IBB fell 1.7 percent, and two newly listed biotech companies, Genocea Bioscenieces and UniQure both fell in their market debuts.
There is also some important data, including weekly jobless claims, international trade, and productivity and costs, all at 8:30 a.m. ET. Chain stores also report monthly sales.
Jobless claims are key because they have risen slightly, which is a concern for economists. They are expected to come in at 338,000 after rising to 348,000 last week.
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Markets are hinging on Friday's jobs report because traders see it as being very closely tied to the Federal Reserve's future action on its quantitative easing program. There has been anxiety that the Fed is moving ahead to slow easing, just as some disappointing data, like Monday's ISM manufacturing survey, is signaling a slowing economy. Economists are watching each report to see how much impact harsher-than-normal winter weather is having on the economy, a temporary trend that should reverse in spring.
So far, the Fed has pared back its QE program by $20 billion and expectations are that it will continue to wind down the $65 billion in monthly purchases until they are ended later this year.
According to Thomson Reuters, 185,000 jobs are expected to be created in January, well above the disappointing 74,000 reported for December.
"I think the market is expecting a decent (jobs) number, but they're worried with the weather, they will get a bad number. The question is not whether it's good or bad. The question is whether it's as bad as everyone thinks," said Gary Thayer, chief macro strategist at Wells Fargo Advisors.
Thayer said it was encouraging to hear Fed speakers Wednesday make positive comments about the economy and say that tapering the quantitative easing bond purchases should continue. Philadelphia Fed President Charles Plosser, a hawkish voting member, said the Fed should wind down the bond-buying program even faster than expected and end it by mid-year.
Atlanta Fed President Dennis Lockhart, a non-voter, said he expects tapering to be completed in the fourth quarter. He said the economy is likely to be stronger this year than last year, and he does not expect the recent selloff in markets to impact the economy.
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"I think this is interesting to hear the positive comments from some Fed officials, but at the same time investors are worrying that things aren't as good," he said. "It'll probably take about another month to sort out. We'll probably have choppy markets until then. There could be additional downside pressure, but if the economy looks as resilient as it should, that should be temporary."
While there is speculation the European Central Bank will take action Thursday, Brown Brothers strategists say they think odds are low it will cut its repo rate 10 to 25 basis points, or set a negative deposit rate.
"A cut in the lending rate would likely be more effective. We think the odds of a negative deposit rate are low at this juncture," wrote Marc Chandler, chief currency strategist at Brown Brothers. Chandler said he expects the ECB to sound dovish but not to make a move.
"First, we believe that ECB officials see the deflation in some peripheral countries as being largely desirable. The deflation has been dubbed "internal devaluation" which is the alternative to and exit from monetary union and external devaluation. It is (a) welcome sign that the competitiveness of such countries is being enhanced," he noted.
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Earnings are expected from General Motors ahead of the open. LinkedIn will get special attention in the afternoon, after Twitter's users numbers came in lower than expected. The list of companies reporting ahead of the opening bell include Kellogg, Aetna, Teva, , AOL, Philip Morris, Sanofi, AstraZeneca, Credit Suisse, Sony, Nobel Energy, Sealed Air, and Dunkin Brands. LinkedIn, Newscorp, Activision Blizzard, and Expedia report after the close.
—By CNBC's Patti Domm. Follow her on Twitter @pattidomm.