U.S. stock index futures pointed to a higher open on Thursday as JPMorgan Chase & Co reported better-than-expected earnings and initial jobless claims fell to their lowest level in nearly two years.
But futures eased from earlier highs after producer prices and the New York Fed manufacturing index both declined more than expected. The New York index dropped to its lowest level since December 2009.
Dow component JPMorgan Chase said second-quarter earnings rose from the prior year and loan loss reserves declined by $1.5 billion. The results helped to allay concerns about the strength of the financial sector and set a high bar for large-cap bank results.
JPMorgan Chase stock edged up 0.6 percent to $40.59 in premarket trading, while Bank of America Corp, another Dow component, rose nearly 1 percent at $15.80.
JPMorgan's operating margins continue to strengthen, which is positive and suggests we'll see more of that tomorrow with Bank of America's results, said John Brady, senior vice president at MF Global in Chicago.
Brady said, though, he was troubled that JPMorgan's profit increased through cost cuts rather than revenue growth.
Jobless claims fell more than expected in the latest week as seasonal layoffs eased at factories. Producer prices fell for a third straight month, suggesting the Federal Reserve would keep interest rates low well into 2011.
The PPI data suggests continued deflationary pressures, led by oil, Brady said.
S&P 500 futures rose 1.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 8 points, and Nasdaq 100 futures were up 4 points.
Earnings season will continue in full force, with Advanced Micro Devices Inc and Google Inc coming after the market closes. The two technology companies, along with JPMorgan Chase, are returning the market's focus to corporate profits a day after economic concerns were raised anew by Chinese data and comments from the Fed.
In deal news, NBTY Inc surged 45 percent to $54.22 in premarket trading after the nutritional supplements maker agreed to be bought by Carlyle Group for $3.8 billion, $55 per share.
Amazon.com Inc fell 2.5 percent to $120.24 before the bell after Bank of America-Merrill Lynch downgraded the stock to neutral from buy, saying growth at the online retailer was slipping.
U.S.-listed shares of BP Plc rose 1.3 percent to $36.65 even as the company faced further delays to a test on its ruptured Gulf of Mexico oil well that could staunch the massive oil spill.
The government's financial reform bill is likely to clear a crucial hurdle in Congress with Senate approval expected Thursday morning, paving the way for U.S. President Barack Obama to sign the measure into law.
China's economy cooled in the second quarter, a slowdown likely to extend over the rest of the year.
The S&P broke a six-day winning streak Wednesday, ending down less than one-tenth of a percent, while the Dow closed a fraction higher after the Fed's comments added to worries following weak retail sales data. The Nasdaq closed higher following strong quarterly results from Intel Corp.
(Editing by Jeffrey Benkoe)