Futures Erase Gains Amid Euro Zone Worries

Futures pared their gains Thursday as investors nervously waited for further developments in the euro zone to address the debt crisis and following a handful of mixed earnings news.

European shares were pressured amid news that Paris and Berlin were at odds over how to increase the firepower of the euro zone’s bailout fund.

French President Nicola Sarkozy told the French parliament the dispute was holding up negotiations on Wednesday. He then flew to Frankfurt to talk with German Chancellor Angela Merkel in an attempt to break the deadlock ahead of a make-or-break European leaders' summit on Sunday.

Meanwhile, investors grew more nervous following news the German government does not rule out the possibility of postponing the EU summit planned for this Sunday due to the stalled talks, according to German newspaper Die Welt. The summit had already been postponed from Oct. 17.

Meanwhile angry protesters vowed to bring Greece to a standstill on the second day of a general strike while disgruntled lawmakers vote on the details of a deeply unpopular austerity package needed to stave off bankruptcy.

Parliament is expected to give a final green light late in the day to the belt-tightening plan required by the EU and the IMF, after backing it in principle in a first reading on Wednesday despite the country's biggest labour action in years.

Weekly jobless claims fell more than expected, slipping 6,000 to a seasonally adjusted 403,000, according to the Labor Department. Economists surveyed by Reuters had expected a drop of 4,000.

On the earnings front, AT&T fell after the wireless carrier posted missed revenue estimates as subscriber growth declined more than expected.

Meanwhile, Nokia posted a smaller-than-expected decline in profits, helped by robust sales of simpler cellphone models.

Eli Lilly was flat after the drugmaker reported a lower profit, but slightly boosted its full-year earnings forecast.

Microsoft , Chipotle Mexican Grill SanDisk and Seagate Technology are slated to post earnings after-the-bell tonight.

Existing home sales data for September is also released at 10am, with annual home sales expected to fall to 4.92 million homes from 5.03 million in the prior month a drop of 2.6 percent. The Philadelphia Fed Index for October is also due at 10am seen remaining negative, but improving to -8.8, according to Briefing.com from September's -17.5, as is the Conference Board's Leading Economic Indicators for September seen post a rise of 0.3 percent, unchanged from August.

On Tap This Week:

THURSDAY: Existing home sales, Philadelphia Fed survey, leading indicators, Fed's Bullard and Kocherlakota speak, NewsCorp investor day; Earnings from Microsoft, Capital One, Chipotle and SanDisk
FRIDAY: Fed's Kocherlakota speaks, 2011 Dodd-Frank Rulemaking Deadline; Earnings from GE, McDonald's, Verizon, Honeywell and Schlumberger

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