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Thursday, July 29, 2010

Indications: Stock futures gain strength as jobless claims fall

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By Polya Lesova and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures pointed to opening gains Thursday on Wall Street, as oil major Exxon Mobil Corp. posted a surge in quarterly profit and the government reported a decline in weekly jobless claims.

Up 30-plus points before the jobless-claims data, Dow Jones Industrial Average futures were lately up 63 points to 10,511.

S&P 500 futures advanced 8.30 points to 1,110.40, while Nasdaq 100 futures gained 11.75 points to 1,881.50.

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The Labor Department reported that those applying for first-time jobless benefits fell 11,000 to 457,000 last week, with the level below the 460,000 expected by analysts. Read more about jobless claims.

The Dow /quotes/comstock/10w!i:dji/delayed (DJIA 10,436, -61.60, -0.59%) fell 0.4% Wednesday, snapping a four-day winning streak, as disappointing data rekindled concerns over U.S. economic growth.

Before the bell Thursday, Exxon Mobil /quotes/comstock/13*!xom/quotes/nls/xom (XOM 60.49, -0.42, -0.69%) said second-quarter net profit climbed 91% to $7.56 billion, or $1.60 a share, from $3.95 billion, or 81 cents a share, in the year-ago period. Analysts expected earnings of $1.46 per share. Read more about Exxon Mobil's results.

Shares of Colgate-Palmolive Co. /quotes/comstock/13*!cl/quotes/nls/cl (CL 77.93, -5.93, -7.07%) dropped 4.6% in premarket trade after the firm lowered its full-year earnings forecast because of a currency devaluation in Venezuela.

Motorola Inc. /quotes/comstock/13*!mot/quotes/nls/mot (MOT 7.83, +0.15, +1.95%) , a provider of mobile phones and telecom technology, posted sharply higher second-quarter net income.

In the quarter ended June 30, Motorola said it earned $162 million, or 7 cents a share, compared with $26 million, or 1 cent a share, in the year-earlier period. Revenue dipped 1.5% to $5.41 billion. Read more about Motorola's results.

In the currency markets, the dollar came under selling pressure amid comments from a ratings agency. If U.S. government projections for debt levels materialize, the nation's triple-A credit rating will have to be examined, Moody's Investors Service's lead sovereign analyst for the country told Dow Jones Newswires on Thursday.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 81.62, -0.56, -0.68%) , which tracks the performance of the greenback against a basket of other major currencies, fell 0.7% to 81.648.

The euro /quotes/comstock/21o!x:seurusd (EURUSD 1.3077, +0.0091, +0.7008%) gained 0.6% to $1.3072, as data showed that economic sentiment in the 16-nation euro zone rose in July, while the number of unemployed in Germany declined.

European shares up after earnings reports

European shares rose, as investors digested a deluge of mostly positive earnings reports. The Europe Stoxx 600 index /quotes/comstock/22c!sxxp (ST:SXXP 256.26, -0.95, -0.37%) gained 0.5% in afternoon trading.

"Company earnings are coming in thick and fast, and the general theme so far has been one of outperformance as opposed to disappointment, and this has invigorated appetite for risk," said Joshua Raymond, market strategist at City Index.

In the energy sector, Royal Dutch Shell /quotes/comstock/23s!e:rdsa (UK:RDSA 1,784, -3.50, -0.20%) reported a 15% rise in second-quarter net profit as higher production and lower costs were partly offset by a bigger tax bill. Revenue surged 42% to $90.57 billion. See more on Shell.

Oil giant BP PLC /quotes/comstock/13*!bp/quotes/nls/bp (BP 38.40, +0.69, +1.83%) /quotes/comstock/23s!a:bp. (UK:BP. 413.45, +10.95, +2.72%) is in negotiations with its Russian venture TNK-BP over the sale of about $1 billion of oil assets in Venezuela, the Times newspaper reported Thursday. BP this week tripled its target for asset disposals to $30 billion in an effort to secure enough cash to cover the costs of the Gulf of Mexico oil spill.

In Spain, Banco Santander /quotes/comstock/13*!std/quotes/nls/std (STD 13.08, -0.19, -1.43%) /quotes/comstock/06x!csan (ES:SAN 10.26, -0.17, -1.63%) said its second-quarter net profit fell 8%, while profit at Telefonica /quotes/comstock/13*!tef/quotes/nls/tef (TEF 68.48, +2.50, +3.79%) /quotes/comstock/06x!ctef (ES:TEF 17.55, +0.55, +3.20%) rose 16%, driven by revenue growth in Latin America.

Germany's blue-chip DAX index /quotes/comstock/30p!dax (DX:DAX 6,135, -44.24, -0.72%) advanced 0.7%. The most actively traded stock in the index was Siemens AG /quotes/comstock/13*!si/quotes/nls/si (SI 97.04, -2.43, -2.44%) /quotes/comstock/11e!fsie (DE:SIE 74.25, -2.35, -3.07%) , which reported a 12% increase in fiscal third-quarter net profit, as orders soared 22% to 20.87 billion euros ($27.08 billion).

Shares of Volkswagen AG /quotes/comstock/11e!fvow3 (DE:VOW3 80.45, +1.96, +2.50%) rose 2% after the car maker said its first-half net profit surged to €1.82 billion from €494 million in the same period a year ago. Revenue rose 21% to €61.8 billion.

In the pharmaceutical sector, shares of AstraZeneca PLC /quotes/comstock/13*!azn/quotes/nls/azn (AZN 50.55, -0.96, -1.86%) /quotes/comstock/23s!a:azn (UK:AZN 3,289, +86.50, +2.70%) rallied 4% after it reported profit growth and raised its guidance. France's Sanofi-Aventis /quotes/comstock/13*!sny/quotes/nls/sny (SNY 29.26, -0.21, -0.71%) /quotes/comstock/24s!e:san (FR:SAN 44.82, -0.61, -1.34%) announced a 61% increase in second-quarter net profit.

Meanwhile, crude-oil futures gained 21 cents to $77.20 a barrel in electronic trading on the New York Mercantile Exchange.

Later in the day, the Treasury will sell $29 billion in 7-year notes.

Polya Lesova is a reporter for MarketWatch, based in Frankfurt. Kate Gibson is a reporter for MarketWatch, based in New York.

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