Stock futures tick lower ahead of jobless claims data
Stock index futures edged lower on Thursday as investors digested a ream of fresh earnings reports and looked ahead to jobless claims data for clues on the strength of the economy.
The S&P 500 has risen for the past three days, lifted by strong corporate results from such companies as Johnson & Johnson and Goldman Sachs , though disappointments from IBM and JPMorgan Chase limited gains.
Morgan Stanley rose 1.4 percent in premarket trading Thursday after posting its results, even though the company was pressured by debt valuation adjustments.
"People are still paranoid about financials, but they've been an area of relative strength lately and a lot of their risks have been worked out," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania, who added he didn't think the sector was attractive in the long-term.
A pair of Dow components also reported. Verizon Communications Inc had revenue that was slightly above expectations while Travelers Cos posted operating earnings that were much stronger than expected.
Weekly U.S. jobless claims, due at 8:30 a.m. EDT (1230 GMT), are seen jumping to 365,000 in the latest week, up from last week's unexpectedly low 339,000. At 10:00 a.m., the Philadelphia Federal Reserve Bank releases its September business activity survey. For the survey's main index, analysts see a reading of 1.0 compared with -1.9 in August.
"Last week was an outlier, so it will be interesting to see how much that bounces back," Dailey said. "Given the last three days, we're set up for bad news causing a reversal."
S&P 500 futures fell 2.9 points and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 2 points and Nasdaq 100 futures fell 6.5 points.
The S&P has gained 2.3 percent over the past three days, and the benchmark index is just 0.33 percent shy of the year's closing high.
Although it's still early in the earnings season, results have been a bit better than anticipated. With 14 percent of S&P 500 companies having reported, 65 percent have beaten analysts' expectations, ahead of the long-term average of 62 percent.
Still, earnings are seen falling 1.7 percent from a year ago, according to Thomson Reuters data, a little better than a forecast for a drop of 2.3 percent earlier in the week.
While U.S. company earnings have been the primary driver over the past two weeks, market participants continue to closely watch Europe for how it may deal with debt in Spain and Greece.
EU leaders meet Thursday at a summit where they will try to bridge differences over plans for a banking union, seen as the first stage in a long-term strategy to overhaul the monetary union.
Still, no substantial decisions are expected, keeping investors cautious over how the region will tackle its three-year-old debt crisis. European shares <.FTEU3> were down less than 0.1 percent.
Still to report on Thursday are Philip Morris , with Microsoft , Google and Advanced Micro Devices scheduled for release after the market closes.
In China, the country's GDP growth rate in the third quarter suggested it may have hit the floor of a seven-quarter-long downturn.
The S&P 500 rose for a third straight day on Wednesday as housing starts hit a four-year high, but the Dow was pressured by IBM after it posted weak revenue.
(Editing by Bernadette Baum)