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Futures Fluctuate After Jobless Claims, Trichet

CNBC.com
Thursday, 2 Dec 2010 | 9:16 AM ET

U.S. futures fluctuated after a unexpected rise jobless claims, and news that the European Central Bank would not be increasing its government bond purchases. But the market gained some support from stronger-than-expected retail sales reports.

Jobless claims rose 26,000, more than expected, to 436,000 for the week ended Nov. 27 from a revised 410,000 the week before, the Labor Department reported. The 4-week moving average moved down 5,750 to 431,000.

Investors also were disappointed in European Central Bank President Jean-Claude Trichet's comments Thursday. Trichet said the ECB is continuing with its government bond purchaseprogram, but he declined to comment on the need to boost the bond purchases.

Trichet spoke after the central bank unveiled its decision to leave rates unchanged. Markets are looking for clues on the bank's strategy regarding buying sovereign bonds from the euro zone. The ECB kept rates at a record low but could signal monetary easing ahead.

Also in Europe, Spain's Prime Minister Jose Luis Rodriguez Zapatero sought to reassure investors of the country's economic stability Wednesday. Zapatero said in a CNBC interview that the country's banking system was healthy.

A 2.468-billion euro bond sale in Spain was well-subscribed, though the 3.72 percent yield was far higher than a similar auction two months ago.

In the all-important currency trade, the dollar edged higher against a basket of foreign currencies as Trichet spoke.

Retailers offered positive news for the market as they posted better-than-expected sales reports for November, reflecting a strong start to the holiday shopping season.

Teen retailers Zumiez and Buckle had higher sales than expected as did LimitedBrands and Gap . Department stores also did well, including Nordstrom's , Macy's and JC Penney's .

In company news, luxury home builder Toll Brothers swung to a quarterly profit of 30 cents a share, well above a 68-cent loss for the same period in 2009. Shares gained 3.5 percent in premarket trading.

European stocks were higher, extending the previous session's gains, and Asian stocks ended higher thanks to the positive close on Wall Street.

In other U.S. economic news, the National Association of Realtors will release October pending home sales data at 10 a.m.

On Tap This Week:

THURSDAY: Pending home sales, Philadelphia Fed Pres Plosser speaks, Fed Gov. Duke speaks, chain-store sales.
FRIDAY: Employment situation, factory orders, ISM non-manufacturing index

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