By Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stock market futures retained Thursday gains as European Central Bank President Jean-Claude Trichet said the ECB's surprise decision to purchase euro-zone government bonds does not represent a change in monetary policy.
Speaking at a monthly news conference in Frankfurt, Trichet said the ECB decision to buy bonds was triggered by the threat of dysfunctional markets that were interfering with monetary policy. But Trichet stressed the measures were temporary. The European Central Bank and Bank of England both left key interest rates unchanged on Thursday and European stocks were largely higher.
U.S. economic data had the Labor Department reporting initial claims for jobless benefits fell by 3,000 last week to 456,000.
Separately, the Commerce Department reported the trade deficit widened in April.
Futures for the Dow Jones Industrial Average rose 85 points, or 0.9% to 9,990.00, while those for the S&P 500 rose 12.2 points, or 1.2% to 1,067.70. Futures for the Nasdaq 100 rose 13.75 points, or 0.8%, to 1,796.00.
U.S. stocks gave up gains Wednesday as Wall Street lapsed in another display of uncertainty after Federal Reserve Chairman Ben Bernanke voiced cautious optimism about the economy and the central bank's Beige Book also noted modest improvement.
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After climbing more than 100 points and clearing 10,000 for the first time this week, the Dow industrials ended at 9,899.25, off 40.73 points, or 0.4%. Analysts said the only major catalyst was a dip below $1.20 for the euro.
However, investors appeared ready to buy again on Thursday.
"Futures are currently driven higher by the fact China has confirmed a near 50% rise in exports - in other words thereby confirming that there still is a strong demand in the U.S. and in Europe (the two major markets for China)," said Christian Tegllund Blaabjerg, chief equity strategist at Saxo Bank.
Jonathan Coughtrey, managing director for Europe and Asia at Action Economics, said futures were getting support not only from China export, but news of its investment intentions in Greece, along with positive Australian data. Also, a pension fund in China argued that the euro can withstand the debt crisis.
"I presume that all the above positives collectively brought some relief amid a lack of negative leads today. Also, market positioning probably played a role as the market has doubtlessly been pretty short lately, so ripe for a short squeeze," said Coughtrey, in an email response.
The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2140, +0.0160, +1.3356%) was bouncing off that $1.20 low, up 0.6% to $1.2053. Goldman Sachs on Thursday said it now is targeting $1.15 for the euro for the next three to 12 months, against a prior forecast of $1.35.
A Fed flow of funds report for the first quarter of 2010 will be released at 12 p.m. Eastern, providing a comprehensive update on household and business balance sheets for the first quarter.
Among stocks in focus, shares of BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 32.93, +3.73, +12.77%) /quotes/comstock/23s!a:bp. (UK:BP. 365.50, -26.05, -6.65%) were up 10% in pre open trade. The company said it knew of no reason why its shares fell 16% in New York on Wednesday. See full story.
China stocks lost ground despite strong exports data, which appeared to have been factored in by investors. Stocks fell on worries that further tightening measures could emerge after property prices in 70 of China's large and medium-sized cities rose for a 12th consecutive month in May.
New Zealand's central bank on Thursday raised its key interest rate for the first time since the global financial crisis began in 2008, citing a recovery. Australia's government reported that the nation's jobless rate fell to 5.2% in May, down from 5.4% in April.
Crude futures were up 61 cents to $74.99 a barrel, while gold prices fell $3.9 to $1,226.00 an ounce.
Barbara Kollmeyer is an editor for MarketWatch in Madrid.