Futures Ease Slightly After Jobless Claims
U.S. stock index futures eased slightly, but remained higher, after jobless claims came in a little weaker than expected.
On Wednesday, investors welcomed better-than-expected private sector jobs data in the hope it signaled positive nonfarm payrolls results on Friday.
Initial claims for unemployment rose by 18,000 last weekto 409,000, up from an upwardly revised 391,000 the week before, the Labor Department said. Economists surveyed by Reuters had expected claims to rise to 400,000, from a previously reported 388,000.
The four-week moving average for claims, however, fell 3,500 to 410,750, the lowest level since July 2008.
Now the market will turn attention to the release of nonfarm payroll data on Friday. The government is expected to report payrolls rose by 175,000, up from only 39,000 in November, while the unemployment rate is expected to fall to 9.7 percent from 9.8 percent, according to Reuters.
Shares closed at multi-year highs Wednesday in the wake of positive economic reports including strong services sector data and the positive ADP report on private sector employment which showed that private payrolls increased by 297,000 in December.
"I think Friday's data is going to be good and I think we're getting a sort of avalanche of numbers that are coming out," Guy Monson, managing partner & CIO Sarasin & Partners, told CNBC when discussing the nonfarm payrolls release scheduled for Friday.
However, Goldman Sachs chief economist Jan Hatzius expressed doubts about the ADP methodology and said he expects a below-consensus growth of 100,000 nonfarm jobs, ahead of the Labor Department's monthly report.
"Despite our generally upbeat view on the economy, which continues to be reinforced by incoming data, we view the dramatic improvement shown in the ADP report with skepticism," Hatzius wrote in a note to clients.
Gains were limited, though, by some disappointing results from the nation's retailers.
Target shares slipped 5 percent in pre-market trading after the big-box chain badly missed expectations for December. Sales rose just 0.9 percent against expectations of a 4 percent gain. Macy's shares fell 3.5 percent as it posted a 3.9 percent gain, instead of 4.4 percent, as expected.
The price of oil remained around $90 a barrel, while gold edged slightly lower. The dollar made slight gains against the euro, but was flat against the yen.
In other news, Microsoft said that it would use chip designs fromARM Holdings in the latest version of its Windows operating system. Shares of ARM jumped in London trading.
ExxonMobil shares edged higher in pre-market trading after Oppenheimer upgraded the company to "outperform" with a $90 price target. Oppenheimer based the move on steadily increasing oil prices which it said will allow the company to accelerate its share repurchases and grow its dividend.
Bank of America rose more than 1 percent in pre-market trading after the company said it was going to start hitting customers with new fees associated with costs incurred from the Dodd-Frank financial reform legislation.
BP shares rose despite a White House reportthat blamed the oil giant as well as its Transocean and Halliburton , for cost cutting decisions that led to the largest offshore oil spill in history. The White House commission said BP and its partners in the Macondo well didn't have a system to ensure their procedures were safe.
In earnings news, Monsanto slipped slightly in pre-market trading after reporting earnings results largely in line with expectations, and reaffirming earnings goals for the full year. Analysts had earlier raised price targets for the world' largest seed company. Constellation Brands fell in pre-market trading despite reporting a stronger-than-expected quarterly profit.
And in politics, Paul Volcker, who is 83, wants to leave his role as head of a panel of experts advising President Barack Obama on economy issues, according to a Reuters report.
European shares were broadly higher with banking stocks leading the gains. China upped its holdings of euro zone debt, including that of Spain's troubled economy, signaling its support for the region, the Chinese Commerce Ministry said. Asian indexes were mixed at the close, but the Nikkei 225 ended sharply higher.
On the Calendar This Week:
THURSDAY: Chain store sales, Monster employment index, natural gas inventories, Treasury STRIPS, money supply.
FRIDAY: Nonfarm payrolls report, consumer credit; Federal Reserve Chairman Bernanke speaks, Federal Reserve Vice Chairman Janet Yellen speaks.
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