Stock index futures pared gains and traded flat despite news of a slightly better-than-expected drop in jobless claims and better-than-expected chain store sales, but also after largely expected news that the European Central Bank raised interest rates.
Initial claims for unemploymentfell 10,000 to 382,000 from an upwardly revised 392,000, the Labor Department reported. The government had reported claims last week had fallen to 388,000, and economists surveyed by Reuters had expected claims would fall to 385,000 last week.
The four-week moving average of unemployment claims fell by 5,750 to 389,500.
The European Central Bank, meanwhile, raised interest rates 25 basis pointsto 1.25 percent on Thursday, in response to rising inflation in the euro zone.
The decision comes in the wake of Portugal’s late call Wednesday for financial aidfrom the European Union for its stricken economy after yields on Portugal's five- and 10-year government debt widened to 9.7 percent.
The Bank of England, meanwhile, held interest rates at 0.5 percent on Thursday, although inflation is rising in England as well.
Negotiations were set to continue on the U.S. budget Thursday following all night discussions described by President Barrack Obama as “constructive” even though an agreement hasn't been reached. The government has been using a House Continuing Resolution since October but President Obama has ruled out extending this option.
Both sides have until midnight on Friday to finalize the Budget before the U.S. government officially runs out of money leading to a government shutdown, which would affect social security payments and lead to the closure of government buildings and offices.