Stock index futures traded essentially flat after an unexpected surge in jobless claims took the wind out of the market, which had risen higher after Caterpillar easily beat both profit and revenue expectations.
Jobless claims soared 51,000 to 454,000, according to the Labor Department. That's far more than the slight rise to 405,000 expected by economists surveyed by Reuters. Claims from the week before were revised slightly lower to 403,000 from 404,000.
The surprising jump was likely due to the relentless snowfall in various parts of the country, which, among other things, slowed down the processing of claims, the government said. The less volatile four-week moving average of initial claims rose 15,750 to 428,750 last week.
Meanwhile, durable goods fell 2.5 percent, the Commerce Department reported. That was far worse than the 1.5 percent rise expected by economists surveyed by Reuters. When volatile transportation orders were stripped out, durable goods orders rose 0.5 percent, although this was also less than expected.
Futures wobbled earlier as investors weighed concerns over developed countries' finances after Standard & Poor's cut Japan's credit rating, as well as a continued deluge of earnings.
But the earnings from Caterpillar, which serves as both an economic bellwether and a major weight on the Dow 30 in terms of market capitalization, helped give the day a positive tone. The company's profit of $1.47 a share easily beat analyst estimates.
Shares gained more than 2.5 percent in premarket trading.
The market gained on Wednesday following the Fed's decision to maintain its $600 billion bond-buying plan. The Fed said the economy is improving, but not enough.
Shares in both AT&T and Procter & Gamble fell in pre-market trading. AT&T's profit narrowly beat estimates, while P&G earnings also appeared to be higher than expectations, but lower than the previous year as commodity costs ate into the bottom line.
Earnings reports from Microsoft and Amazon.com earnings were scheduled for release after the closing bell. ec
Several tech companies released earnings after the market closed Wednesday, including Netflix , which surprised with a surge in quarterly profits and an upbeat outlook for the current quarter. Shares of the entertainment distribution company soared in pre-market trading. Motorola Mobility Holdings fell in pre-market trading, however, after warning it would revert to a loss in the current quarter because of competition from Apple's iPhone, after posting a profit in the fourth quarter. This was the wireless company's first earnings release as a separate company.
Starbucks reported results after the market closed Wednesday, and will be among stocks to watch Thursday.
The world's largest coffee chain said it expects rising coffee prices to hit profits more than it previously thought. The news sent shares lower even though earnings came in above analyst forecasts.
Stronger-than expected new-home sales in the U.S. and President Barack Obama's call for lower corporate taxes also boosted the Dow 30, which breached 12,000 for the first time in almost three years during Wednesday's session. The index failed to close above that psychologically important threshold, however.
On Thursday, monetary policy will remain in focus as U.S. Treasury Secretary Timothy Geithner traveled to the World Economic Forum’s annual gathering in Davos where he was due to meet European Central Bank President Jean-Claude Trichet.
Geithner told the Wall Street Journal that he will reassure the global movers and shakers there that the U.S. has the political will and capacity to address its fiscal deficit and deliver on the program President Barack Obama outlined in his State of the Union address Wednesday.
Trichet told CNBC in Davoslate on Wednesday that solving the euro zone crisis was “a work in progress” and repeated his call for the euro zone's rescue fund to be extended and made more flexible.
Investors are watching several key economic reports on Thursday, including weekly jobless claims—expected to rise to 410,000 for initial claims—and durable goods, both at 8:30 a.m.
On the Calendar This Week:
THURSDAY: Pending home sales, natural gas inventories, seven-year Treasury note auction, money supply; before-the-bell earnings from AT&T, Caterpillar, and Colgate-Palmolive; after-the-bell earnings from Microsoft.
FRIDAY: GDP (first reading), consumer sentiment; NBCU/Comcast deal closes; before-the-bell earnings from Chevron and Honeywell.
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