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Thursday, June 3, 2010

Indications: Futures point slightly higher as jobs data loom

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By Simon Kennedy, MarketWatch

LONDON (MarketWatch) -- U.S. stock market futures pared early gains to point slightly higher Thursday as investors awaited a raft of economic and jobs data, and as the country's retailers revealed their latest same-store-sales figures.

S&P 500 futures rose 3 points to 1,099.70 and Nasdaq 100 futures added half a point to 1,879.50. Futures on the Dow Jones Industrial Average rose 25 points.

Stocks bounce, payrolls loom

European stocks join in what looks like a relief rally for global equities but U.S. payroll numbers will probably keep a lid on things.

U.S. stocks rose broadly Wednesday, led by the energy sector, with a better-than-expected report on pending-home sales also contributing to the third best day of the year so far for the Dow industrials, which closed up over 225 points.

Economic data will be in focus again Thursday, with ADP's estimate on private-sector employment due one day ahead of the government's pivotal report on nonfarm payrolls and joblessness.

Also due before financial markets open Thursday are the latest figures on weekly jobless claims and first-quarter productivity in the U.S. economy.

Data on factory orders for April and the Institute for Supply Management's services index for May will come out after the opening bell.

"The recovery is looking increasingly robust as the labor market is turning and underlying domestic demand has improved faster than expected. Downside risks from a jobless recovery are now limited," said analysts at Danske Bank.

"The debt crisis in Europe is the main risk. It is already taking a toll on growth via deteriorating financial conditions. If market conditions do not improve a more pronounced slowdown is in the offing for the second half," they added.

In currencies, the dollar gained against Japan's yen and was also up slightly against the euro ahead of Thursday's data. The euro fell 0.1% to $1.2239, while the dollar rose 0.6% to 92.67 yen.

In energy, crude-oil prices strengthened, with the July light crude contract gaining 45 cents to stand at $73.31 a barrel in electronic trading.

BP /quotes/comstock/23s!a:bp. (UK:BP. 443.60, +13.85, +3.22%) /quotes/comstock/13*!bp/quotes/nls/bp (BP 37.66, +1.14, +3.12%) remained in the spotlight as the oil giant managed to dislodge a stuck saw blade and continue its latest attempt to stop the six-week oil leak in the Gulf of Mexico.

The company said Thursday that it will fund the building of six sand barriers off the coast of Louisiana, adding another $360 million to the ballooning costs of containing the spill. Shares of BP rose 3.2% Thursday in London trading.

Retailers will be in focus as they reveal same-store-sales figures for May.

Costco Wholesale Corp. /quotes/comstock/15*!cost/quotes/nls/cost (COST 58.95, +0.97, +1.67%) was among the first to release figures, saying same-store sales rose 9% as net sales climbed 11% to $6.09 billion.

J.P. Morgan Chase /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 39.55, +1.01, +2.62%) was also in the news after the U.K.'s Financial Services Authority fined the blue-chip banking giant a record 33.3 million pounds ($49 million) for failing to properly segregate as much as $23 billion of client funds.

The money could have been at risk if the firm had become insolvent, the regulator said. See full story.

Also of note, Ford Motor Co. /quotes/comstock/13*!f/quotes/nls/f (F 11.85, +0.44, +3.86%) said late Wednesday it would kill off its Mercury brand by the end of the year to focus on its core products.

European markets posted strong gains Thursday, with the French CAC 40 index rising 2.2%, while in Asia Japan's Nikkei 225 Average closed up 3.2% on the session.

Simon Kennedy is the City correspondent for MarketWatch in London.


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