MarketWatch.com - Pre-Market Indications

Thursday, December 16, 2010

Indications: U.S. futures retain gains as jobless claims fall

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By Polya Lesova and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock futures retained slight gains Thursday after a round of economic data illustrated an unexpected drop in weekly jobless claims and the first rise in housing starts in three months.

“The level of claims continues the improvement seen over the past six weeks, but the question still remains of when the monthly job gains will be enough to lower the unemployment rate on a sustainable pace,” noted Peter Boockvar, equity strategist at Miller Tabak.

Tempering investor enthusiasm, package-shipping company FedEx Corp. /quotes/comstock/13*!fdx/quotes/nls/fdx (FDX 94.23, +1.84, +1.99%)  reported second-quarter profit that missed expectations. Read about FedEx’s results.

FedEx and competitor United Parcel Service Inc. /quotes/comstock/13*!ups/quotes/nls/ups (UPS 73.46, +1.21, +1.67%)   are both viewed as economic bellwethers, given their shipments cover a broad range of industries.

Futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\h11 (DJH11 11,425, +10.00, +0.09%)  gained 5 points to 11,420, and S&P 500 futures /quotes/comstock/21m!f:sp\h11 (SPH11 1,236, +3.60, +0.29%)  added nearly 1 point to 1,232.8.

Why are bond yields rising?

Ben Bernanke's interview on '60 Minutes' causes a flurry of activity in the bond market by so-called bond vigilantes.

Nasdaq 100 futures /quotes/comstock/21m!f:nd\h11 (NDH11 2,219, +17.25, +0.78%) rose 3.75 points to 2,205.

Stock-index futures lightly pared already weak gains after the government reported its count of those filing first-time claims for unemployment benefits last week fell by 3,000 to 420,000. Read more about initial jobless claims.

Separate data had housing starts rising more than expected in November, but permits for future construction declined. Read about the latest housing data.

On Wednesday, U.S. stocks were hit by a late-session decline for a third consecutive day, with analysts saying the indexes are hitting technical hurdles when trying to climb.

On the earnings front, General Mills Inc. /quotes/comstock/13*!gis/quotes/nls/gis (GIS 36.66, +0.28, +0.77%)  reported a 9% rise in fiscal second-quarter profit.

Home-furnishings retailer Pier 1 Imports Inc. /quotes/comstock/13*!pir/quotes/nls/pir (PIR 10.06, -0.32, -3.08%)  said its third-quarter profit dropped 46% from the year-ago period, when it recorded an income-tax benefit.

Wall Street is also tracking events overseas, with European Union leaders meeting Thursday in an attempt to reach consensus on further steps to try to contain a debt crisis now seen as threatening Portugal and Spain.

And the deal struck between President Obama and Republicans that would extend tax cuts for nearly all Americans could move to the House of Representatives as soon as Thursday.

Polya Lesova is chief of MarketWatch’s London bureau. Kate Gibson is a reporter for MarketWatch, based in New York.

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