Futures Turn Higher in Volatile Trading

Futures erased all their earlier losses in a choppy pre-market session Thursday amid volatility in the European market and after an unexpected decline in weekly jobless claims.

European shares fellas French banks tumbled, extending the previous day's losses amid concerns over the sector's outlook. French banks were hit again with Societe Generale tumbling as much as 7 percent.

Stocks closed sharply lower in the previous session in volatile trading, prompted by rumors that France was in danger of losing its AAA credit rating and that at least one French bank could collapse due to its exposure to Greek and other periphery country sovereign debt.

All three major credit ratings agencies published statements denying the rumors and maintained stable outlooks for the French economy.

On the economic front, claims for unemployment benefits hit a four-month low, dropping 7,000 to a seasonally adjusted 395,000 in the previous week, according to the Labor Department. Economists had forecast claims steady at 400,000, according to a Reuters poll.

Meanwhile, the U.S. trade gap widened to $53.1 billion in June to its largest since October 2008, as both U.S. imports and exports declined in a sign of slowing global demand, according to the Commerce Department. Economists had expected the figure to narrow to $48 billion.

Among earnings, Cisco soared more than 10 percent after the tech bellwether beat profit and revenue expectationsand delivered an encouraging outlook.

Kohl's also gained after the retailer raised its full-year profit outlookand said it expects more sales gains at its established stores.

Sara Lee reported lower-than-expected earnings, despite higher sales thanks to price increases.

Nordstrom and Nvidia are slated to post earnings after-the-bell tonight.

Coming Up This Week:

THURSDAY: 30-yr bond auction, money supply; Earnings from Nordstrom, Nvidia
FRIDAY: Retail sales, consumer sentiment, business inventories; Earnings from JCPenney