Indications: U.S. futures gain on earnings optimism

By William L. Watts and Nick Godt, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock-index futures extended gains Thursday, as strong company earnings and a drop in jobless claims boosted sentiment on Wall Street.

“The focus at the moment is on better-than-expected earnings” in recent days after an earlier round of disappointment on the back of lackluster reports from the technology sector, said Stephen Pope, managing partner at Spotlight Ideas.

Futures added to gains after the Labor Department said weekly jobless claims fell 23,000 in the latest week to 452,000. Economists polled by MarketWatch had expected initial claims to fall to 450,000.

Speculation that the economic recovery is possibly somewhat “ahead of the game” relative to other downturns induced by financial crises is also providing a lift, he said.

Futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\z10 (DJZ10 11,088, 0.00, 0.00%)  rose 48 points to 11,111, while futures on the S&P 500 /quotes/comstock/21m!f:sp\z10 (SPZ10 1,176, -0.10, -0.01%)  gained 5 points to 1,179.7. Nasdaq 100 futures /quotes/comstock/21m!f:nd\z10 (NDZ10 2,081, +0.75, +0.04%)  added 12 points to 2,095.75.

Shares of McDonald's Corp. /quotes/comstock/13*!mcd/quotes/nls/mcd (MCD 78.44, +1.03, +1.33%)  rose in pre-open trade after the fast-food giant said third-quarter net income rose to $1.39 billion, or $1.29 a share, in the third quarter from $1.26 billion, or $1.15 a share in teh same period a year ago, while revenues rose 4% to $6.3 billion. Wall Street analysts surveyed by FactSet Research produced a consensus forecast of $1.25 a share on revenue of $6.22 billion.

Shares of Caterpillar Inc. /quotes/comstock/13*!cat/quotes/nls/cat (CAT 78.89, -0.99, -1.24%)  also rose in pre-market action after the Peoria, Ill.-based construction-equipment maker said third-quarter profit rose 96% to $792 million, or $1.22 a share, from a year ago, while sales increased 53% to $11.13 billion. Wall Street analysts expected earnings of $1.09 a share and revenue of $10.5 billion, according to FactSet.

Travelers Companies Inc. /quotes/comstock/13*!trv/quotes/nls/trv (TRV 54.98, +0.34, +0.62%)  said third-quarter net profit rose to $1.01 billion, or $2.11 a share, from $935 million, or $1.65 a share, in the same period a year ago. The property-casualty insurance firm said it expects full-year 2010 operating income in the range of $5.75 to $5.95 a share, compared to a previously-announced range of $5.20 to $5.45.

Indianapolis health-care giant Eli Lilly & Co. /quotes/comstock/13*!lly/quotes/nls/lly (LLY 35.50, -0.51, -1.42%)  reported a 38% rise in third-quarter net income to $1.3 billion, or $1.18 a share. The firm also raised its full-year adjusted earnings forecast.

U.S.-listed shares of mobile-phone giant Nokia Corp. /quotes/comstock/13*!nok/quotes/nls/nok (NOK 11.28, +0.45, +4.16%)   /quotes/comstock/22u!e3:o-nok1v-eur (FI:NOK1V 8.21, +0.49, +6.28%)  rallied in premarket trading after it said it swung to a profit attributable to equity holders of 529 million euros ($742 million) in the third quarter from a loss of €559 million in teh same period a year ago. The result topped forecasts for earnings of €229 million.

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Earnings from online-auction site eBay Inc. /quotes/comstock/15*!ebay/quotes/nls/ebay (EBAY 27.20, +1.54, +5.98%)  and DVD-rental service Netflix Inc. /quotes/comstock/15*!nflx/quotes/nls/nflx (NFLX 172.69, +19.54, +12.76%) , released after Wednesday’s close, also topped analysts expectations.

U.S. stocks posted sharp gains Wednesday, boosted by a positive outlook by financial-sector firms and strong earnings from airlines and other bellwethers.

The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 11,147, +38.60, +0.35%)  rose 129.35 points, or 1.2%, to close at 11,107.97 on Wednesday, while the Standard & Poor’s 500 stock index /quotes/comstock/21z!i1:in\x (SPX 1,180, +2.09, +0.18%)  rose 12.27 points to 1,178.18.

China’s economic growth cooled in the third quarter, but was slightly stronger than expected. The nation’s National Bureau of Statistics on Thursday said the economy grew 9.6% in the third quarter compared to a year earlier. Economists surveyed by Dow Jones Newswires had produced a consensus estimate of 9.5%.

Meanwhile, the pan-European Stoxx 600 index /quotes/comstock/22c!sxxp (ST:SXXP 267.62, +1.49, +0.56%)  rose 0.5% in afternoon trading.

The U.S. dollar was lower versus most major rivals, with the euro /quotes/comstock/21o!x:seurusd (EURUSD 1.3924, +0.0003, +0.0216%)  up 0.5% versus the greenback at $1.4010.

In the commodity markets, December gold futures /quotes/comstock/21e!f:gc\z10 (GCZ10 1,326, 0.00, 0.00%)  fell $5.10 to $1,339.50 an ounce. Crude-oil futures were flat at $81.77 a barrel in electronic trade.

William L. Watts is a reporter for MarketWatch in London. Nick Godt is MarketWatch's markets editor, based in New York.

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NYSE Arca Morning Update - 08:30:00 ET

NYSE Arca Morning Update for Thursday, Oct 21, 2010 :

STOCKS TRADING ON NYSE Arca AT A PRICE 15% OR MORE AWAY FROM
THE PREVIOUS TRADE DAY'S CONSOLIDATED CLOSE PRICE (AS OF 08:30:00 ET)

Stock Wednesday's Close Current Price Pct Change Current NYSE ARCA Vol
GRNB $6.47 $3.46 (46.6%) 4,700
WSTL $2.20 $2.56 16.2% 1,000

10 MOST ACTIVE STOCKS ON NYSE ARCA AS OF 08:30:00 ET

BASED ON DOLLARS TRADED: | BASED ON SHARES TRADED:
Stock $ Volume Price PctChg | Stock Share Vol Price PctChg
GLD $70,756,772 $131.35 0.0% | C 3,741,103 $4.15 1.0%
SPY $63,352,117 $118.47 0.5% | NOK 3,248,872 $11.48 6.0%
NOK $37,467,931 $11.48 6.0% | GLD 538,400 $131.35 0.0%
NFLX $19,492,631 $171.48 12.0% | SPY 534,476 $118.47 0.5%
AAPL $17,726,080 $312.68 0.7% | BAC 368,909 $11.83 0.8%
CAT $16,586,728 $80.85 0.7% | CRUS 289,294 $14.42 (11.7%)
C $15,514,421 $4.15 1.0% | CAT 204,291 $80.85 0.7%
BHP $13,315,902 $82.47 1.4% | BHP 162,003 $82.47 1.4%
QQQQ $7,480,487 $51.57 0.7% | QQQQ 145,046 $51.57 0.7%
AMZN $5,643,979 $162.50 2.4% | NFLX 113,078 $171.48 12.0%

Price changes may be affected by symbol splits and dividends.

Consolidated close price is the last print (excluding prints with trade
conditions) prior to 4PM ET.

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