Futures held their modest gains Thursday even after a slight increase in weekly unemployment benefits and mixed results from the Italian bond auction.
New U.S. claims for unemployment benefits rose 15,000 to a seasonally adjusted 381,000, according to the Labor Department, but remained under the key 400,000 level for the fourth straight time. Economists polled by Reuters had forecast claims rising to 375,000.
With only two full trading sessions left in the year, trading volume is expected to remain light throughout the shortened holiday week as most investors are unlikely to make large bets until after the New Year. Major averages have also been struggling to finish the year in positive territory. Of the three major averages, the Dow is the only index in the black for the year.
Paul Hickey from Bespoke noted that the second to last day of the year finishes higher 68 percent of the time, while the last day is positive only 32 percent of the time.
In Europe, Italy sold just over 7 billion euros ($9 billion) in an auction of longer-term debt, with yields falling.
The yield on Italian 10-year bonds fell from the euro era highs reached in November, settling slightly below the market-sensitive level of 7 percent in an auction on Thursday.
Investors were looking to the auction of longer term Italian bonds to see whether appetite for the country's debt had returned, after yields halved in the sale of six-month T-bills on Wednesday.
“All the data we’ve seen today has been neither good nor bad including the Italian auction—it wasn’t horrible, it was not great,” said Jim Iuorio, director of TJM Institutional Services. “The jobless claims were a little worse than expected, but much better than they were a couple months ago. So we never get any clarity in anything, it’s a slow moving trend towards better.”
Also on the economic front, the Chicago PMI manufacturing data will be released at 9:45 am ET and analysts at Briefing.com see it falling slightly to 60.1 from November's 62.6. A number above 50 indicates an improvement in financial activity, as indicated by a survey of purchasing managers.
In the financial markets, the Financial Times reported that the Federal Reserve has asked an industry task force to work on a plan to scale back systemic risk in the funding market which was at the center of the financial crisis and reduce trader dependence on the two clearing banks, JPMorgan Chase and Bank of New York Mellon.
The paper reported that the changes would bring more automation to the repurchases, or repo market, and that the task force is made up of leading banks and investors.
In corporate news, China's e-commerce company Alibaba Grouphired a lobbying firm in Washington, in what Reuters said could be a sign that the company would be willing to bid for Yahoo if talks to unwind their Asia partnership fail.
Mosaic slipped after the fertilizer producer said it will slash its phosphate production because prices have fallen to unsustainable levels.
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On Tap This Week:
THURSDAY: Chicago PMI, oil inventories, Fed balance sheet/money supply
FRIDAY: Farm prices
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