Futures Jump on Drop in Jobless Claims

Futures turned higher Wednesday after a report showed a sharp drop in jobless claims last week.

Most Asian markets closed the session in the green but suffered record losses for the whole year.

The U.S. bond market will close at 2 p.m. today. The stock market is open until its usual time, 4 p.m.

Initial claims for unemployment benefits dropped by 94,000 last week to 492,000, the largest drop since 1992. Economists had expected a drop, but only about 21,000.

Meanwhile, continuing claims for unemployment benefits hit 4.506 million, the highest since 1982.

Australia delivered its worst year on record in 2008, posting a loss of 41 percent, while Hong Kong's Hang Seng Index snapped a five-year winning streak to plunge 48 percent in 2008, its worst performance since a 60 percent slump in 1974 fuelled by the world oil crisis.

European stocks were up in weak trade, but were set to end the year on a dismal note, with the FTSEurofirst 300 index of top European shares losing nearly 45 percent this year, the worst performance in its history.

In corporate news, mobile phone maker Motorola said it will lay off 400 more employees in the fourth quarter than it originally planned, resulting in additional charges. In October, Motorola said it would lay off 1,500 people in the fourth quarter.

Meanwhile, investors are still reeling from the Bernard Madoff scandal, with federal prosecutors beginning to consider what role offshore fund operations may have played in the $50 billion Ponzi scheme that Madoff is accused of orchestrating.

The Austrian government may be forced to run Bank Medici after the Madoff scandal hurt the private bank, according to a report in an Austrian newspaper.

In media news, Viacom said it will pull its cable television networks, including Nickelodeon, Comedy Central and MTV, off Time Warner Cable if the companies do not reach a deal on carriage fees by Jan. 1.

On the economic front, mortgage applications data will be released at 7 am New York time and jobless claims arrive at 8:30 am. Analysts surveyed by Briefing.com expect initial jobless claims to have fallen to 575,000 last week from 586,000.