Futures Gain After Job News; Eye on Trichet

Stock index futures added to gains Thursday after the government reported an unexpectedly large drop in jobless claims.

Initial claims for unemployment fell 20,000 to 368,000 last week, the lowest level since May 2008, while the four-week moving average fell 12,750 to 388,500, the Labor Department reported.

Economists polled by Reuters had forecast claims would rise to 398,000 from a downwardly revised 388,000 the week before.

Stocks ended slightly higher Wednesday on forecast-beating private-sector jobs data, although traders kept a wary eye on political unrest in the Middle Eastand rising oil prices.

Futures slipped a few points, before reboudning, after jobless claims were released as European Central Bank President Jean-Claude Trichet spoke on Thursday, saying an increase at the ECB's next meeting is possible. Earlier Thursday, the ECB kept rates at 1 percent.

The dollar fell against a basket of currencies on Trichet's commentsas the euro rose.

Oil prices fell more than 1 percent on Thursday as the Arab League considered a peace plan for Libya, but traders were skeptical over the prospect of any immediate end to the fighting in Libya.

Also on Thursday, the Labor Department said the pace of U.S. nonfarm productivity slowed. Productivity rose at a 2.6 percent annual rate, and at a 2.3 percent pace in the third quarter, which was expected.

At 10 a.m., the Institute for Supply Management's non-manufacturing survey will be released.

Early indications of monthly chain store salesshow retailers did better than expected in February. Analysts expect retailers, on average, will show a 3.6 percent gain in sales.

Kroger gained after reporting a boost in quarterly earnings, and announcing a $1 billion share repurchase plan.

Foot Locker gained after reporting forecast-beating earnings after the bell Wednesday.

Anheuser-Busch Inbev was unchanged after reporting a better-than-expected 22 percent fourth quarter profits improvement as higher margins offset falling sales in the U.S. and slowing volume growth in Brazil.

And finally, took a big step toward securing its prized $14 billion buyout of BSkyB Thursday when Britain accepted its proposals to alleviate competition concerns.

On tap this week:

THURSDAY: Chain store sales, ISM non-manufacturing index, natural gas inventories, money supply; Minneapolis Fed President Kocherlakota speaks, Atlanta Fed President Lockhart speaks; earnings before-the-bell from Heinz, Kroger; earnings-after-the-bell from Novell.
FRIDAY: Non-farm payrolls report, factory orders; Federal Budget Deadline.

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