Futures Flat After Economic Data; Cisco Surges

U.S. stock index futures were flat Thursday as investors digested a handful of weaker-than-expected economic data against upbeat earnings report from Cisco.

(Read More: Talk of Fed Tapering Not Spooking Markets Yet)

Weekly jobless claims jumped by 32,000 to a seasonally adjusted 360,000, according to the Labor Department, climbing at the fastest pace in six months. Meanwhile, housing starts fell 16.5 percent in April to a 853,000-unit annual rate, well below expectations for a 945,000-unit rate.

Separately, consumer prices decline 0.4 percent in April, the sharpest decline in more than four years, due to a drop in gasoline costs. Meanwhile, the signs of muted inflation pressures could bolster the case for the Fed to remain on its very easy monetary policy path, despite divisions among policymakers over money printing to buy bonds.

Other data out on Thursday include May's "Philly Fed" index, which measures changes in business growth.

Among earnings, Wal-Mart declined after the world's largest retailer missed earnings expectations, with U.S. same-store sales down 1.4 percent, hurt by combination of a delay in income tax refund checks, cool weather, less grocery inflation than expected, and the payroll tax increase.

Cisco Systems surged more than 10 percent after the network equipment maker topped quarterly expectations and said current-quarter revenue could increase. CEO John Chambers also said the company was seeing positive signs in the U.S. and that other parts of the world are "encouraging." Smaller rivals Juniper and Alcatel-Lucent also rallied.

Kohl's soared after the department store chain posted earnings that easily topped Wall Street expectations after cost cuts boosted margins.

Dell, JC Penney, Nordstrom, Applied Materials and Autodesk are slated to post earnings after the closing bell.

So far, more than 90 percent of S&P 500 companies have posted quarterly results, with 67 percent topping earnings expectationsand 24 percent missing forecasts, according to Reuters. If all remaining companies post numbers in line with estimates, earnings will be up 5.3 percent on last year.

However, sales numbers have come in 1 percent below estimates on average, with only 46 percent of companies beating their revenue projections.

Overseas, first quarter growth numbers from Japan topped expectations, but a drop in capital expenditure showed the economy is still dogged by deflation.

"Capital expenditure is going to continue to be a drag, despite the improvement in corporate profits. Companies are still cautious about ramping up investment and you really need to see a higher level of export growth that pushes companies to invest," said Izumi Devalier, Japan economist at HSBC.

(Read More: Hold On, Japan Still Missing Key Pillar of Growth)

"Without the third arrow of Abenomics, which is the growth strategies and structural reforms, the corporate environment is still very restrictive," she added.

Meanwhile, in Europe, markets were choppy after data out on Wednesday showed the euro zone contracted for the sixth consecutive quarter at the start of this year.

Several Federal Reserve officials will give speeches on Thursday, and investors will listen for hints of when the Fed might taper off or end quantitative easing. The Fed is currently buying $85 billion in Treasurys and mortgage securities each month in a program that has been viewed as positive for stocks and a hedge against economic weakness.

(Read More: A Flurry of Fed Speakers to Guide Wall Street)

Berkshire Hathaway edged lower after credit rating agency Standard & Poor's lowered its rating on the insurance and industrial conglomerate controlled by billionaire investor Warren Buffett, by one notch to "AA" from "AA-plus," citing the company's reliance on its insurance operations for dividend income.

—By CNBC's JeeYeon Park. Follow JeeYeon on Twitter: @JeeYeonParkCNBC

Coming Up This Week:

THURSDAY: Philadelphia Fed survey, natural gas inventories, Fed balance sheet/money supply, Comcast shareholder mtg, Hess annual mtg, Intel shareholder mtg, Tiffany shareholder mtg; Earnings from Dell, Applied Materials, Autodesk, Marvell Tech, Nordstrom, JCPenney
FRIDAY: Consumer sentiment, leading indicators, Chipotle shareholder mtg, Icahn/Transocean shareholder mtg, JCPenney annual mtg

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