Futures Ease Losses on Jobless Claims Drop
U.S. stock futures eased losses after an unexpectedly large jobless in weekly jobless claims.
Futures had been under pressure before the open as investors became concerned China could tighten monetary policy further, and despite a surge in profits reported by Morgan Stanley.
Jobless claims dropped by 37,000 to 404,000 for the week ended Jan. 15, the Labor Department reported on Thursday. Economists at Reuters had expected claims to fall to 420,000 from 445,000 the week before.
Stocks had their worst day in nearly two months Wednesday, with financial stocks among the leading laggards after disappointing earnings for the financial sector, including from and Citigroup the day before.
Morgan Stanley's shares gained after reporting profits soared 60 percentthanks to strong retail brokerage fees offseting poor trading results from its fixed-income division. Other brokerages have suffered as a result of sliding fixed-income trading profits.
Also in the financial sector, Huntington Bancshares fell despite reporting profit results that beat expectations. The regional bank, based in Columbus Ohio, earned 5 cents a share, compared with a loss of 56 cents a share a year earlier.
Googleprovides quarterly numbers after the closing bell and was expected to report a 22 percent jump in fourth-quarter revenue.
eBay will also be in the spotlight on Thursday after the group provided investors with a bullish 2011 profit outlook after the bell on Wednesday.
Meanwhile, F5 Networks continued to plummet in pre-market trading after the network equipment maker posted weaker-than-expected quarterly revenue ater the market closed Wednesday. F5 makes equipment to optimize and speed up the Internet.
Southwest Airlines shares gained in the pre-market after the airline reported strong quarterly profits as passenger sales offset rising fuel costs. Southwest's net income was $131 million, or 18 cents a diluted share in the fourth quarter, compared with profit of $116 million, or 16 cents a share. Excluding the effect of fuel contracts, profit came to 15 cents a share, in line with average analyst expectations, according to Thomson Reuters I/B/E/S.
More economic releases were expected later Thursday, including existing home sales, the Philadelphia Fed survey, and leading indicators will be released at 10 a.m.
Home buying is expected to have strengthened in December as existing home sales increased to 4.8 million, Briefing.com said.
The Philadelphia Fed Index is forecast to show a deceleration in manufacturing activity in the Philadelphia region in January, and the index of leading indicators is forecast to fall 0.6 percent in December. Commodities traders will look out for crude inventories, which will be released at 11 a.m.
Traders will also digest Chinese GDP and inflation data which was released overnight. Stronger-than-expected growth in China raised the probability of tighter monetary policy in the country, which dragged down Asian stocks.
Europe's sovereign woes were in the spotlight again on Thursday.The Wall Street Journal reported after Wednesday's close that Spain plans to inject billions of euros into its troubled savings banks.
And Chinese President Hu Jintao continues his visit to the United States on Thursday, a day after Hu answered questions on the yuan and human rights.
On the Calendar This Week:
THURSDAY: Existing home sales, leading indicators, Philadelphia Fed survey, oil inventories; earnings after-the-bell from Advanced Micro, Capital One.
FRIDAY: Dodd-Frank rulemaking deadline; earnings before-the-bell from Bank of America, GE, BB&T, Schlumberger and Sun Trust.
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