Indications: U.S. stock futures fade as jobless claims rise

By Polya Lesova and Kate Gibson, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock futures lost early gains Thursday after U.S. weekly jobless claims climbed more than Wall Street expected, denting enthusiasm a day before the monthly jobs report.

Investors also watched events overseas, with the European Central Bank opting to keep interest rates on hold, as expected. Read more about the ECB.

The government said initial claims for unemployment benefits rose by 26,000 to 436,000 last week. Read about jobless claims.

Shedding earlier gains of more than 40 points, futures on the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\z10 (DJZ10 11,350, +117.00, +1.04%)  fell 8 points to 11,225. S&P 500 index futures /quotes/comstock/21m!f:sp\z10 (SPZ10 1,218, +13.50, +1.12%)  declined 1.1 points to 1,203.4.

Nasdaq 100 futures /quotes/comstock/21m!f:nd\z10 (NDZ10 2,180, +21.50, +1.00%)  maintained a fractional advance at 2,158.75.

Is the rally in stocks overdone?

Wednesday’s big rally in stocks could be overdone, as the Dow erases all of its November losses.

The blue-chip Dow index /quotes/comstock/10w!i:dji/delayed (DJIA 11,352, +95.92, +0.85%)  rallied 2.3% Wednesday, posting its biggest percentage gain since Sept. 1, as robust economic data from China, Europe and the U.S. buoyed sentiment on Wall Street.

“It was a tremendous day for market speculation yesterday,” Deutsche Bank said in a note. “The net result was a short-covering frenzy for the [European Union] peripherals and a grab-a-thon for other risk assets.”

Thursday’s U.S. economic calendar also includes a report on pending-home sales for October, due at 10 a.m. Eastern.

On the corporate front, many U.S. retailers are reporting November same-store sales. Costco Wholesale Corp. /quotes/comstock/15*!cost/quotes/nls/cost (COST 68.75, +0.44, +0.64%)  posted a 9% increase in comparable sales for the four-week period ended Nov. 28. Read about November sales reports.

Food retailer Kroger Co. /quotes/comstock/13*!kr/quotes/nls/kr (KR 21.65, -2.21, -9.26%)  said it swung to a third-quarter profit from a year-earlier loss.

In deal news, PepsiCo Inc. /quotes/comstock/13*!pep/quotes/nls/pep (PEP 64.97, -0.66, -1.00%)  said it will acquire 66% of Russia’s Wimm-Bill-Dann Foods /quotes/comstock/13*!wbd/quotes/nls/wbd (WBD 31.19, +6.69, +27.31%)  for $3.8 billion. PepsiCo added it will offer to buy the remaining shares of Wimm-Bill-Dann after completion of the first acquisition “at such time and on terms as are mandated by Russian law.”

The deal will raise PepsiCo’s annual global revenue from nutritious and functional foods to nearly $13 billion from about $10 billion currently. Read more on PepsiCo’s deal.

Shares of Aeropostale Inc. /quotes/comstock/13*!aro/quotes/nls/aro (ARO 23.45, -3.35, -12.50%)  dropped in premarket trading. The retailer’s third-quarter results missed market expectations.

Focus on Trichet’s news conference

On the other side of the Atlantic, the European Central Bank decided to keep its key rate on hold at 1%, as expected. Read about the ECB’s rate decision.

European stocks and the euro extended recent gains, as the Spanish government successfully completed a bond auction Thursday, though the yield rose sharply.

The euro gained 0.5% to $1.3178, and the Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:STOXX600 271.46, +4.35, +1.63%)  advanced 0.6%. Spanish stocks once again outperformed, rising 1.8%.

In Asia, equities posted strong gains, with Japan's Nikkei Stock Average rising 1.8%. See Asia Markets.

In the commodity markets, oil futures were little changed at $86.77 a barrel in electronic trading on Globex.

Gold futures gained $3.50 to $1,390.80 an ounce.

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

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