Stock index futures pointed to a more than 1 percent gain on Thursday as the first quarter's better-than-expected corporate profits stoked optimism the economic slump is showing signs of easing.
Among the bright spots, Dow Chemical Co
Optimism extended from the previous session after the Federal Reserve said Wednesday the economic outlook had improved modestly since its last meeting in March. The comments helped stocks close higher.
The earnings are clearly coming in much, much better than analysts expected, so that's clearly helping the market, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.
On the data front, investors await reports on initial jobless claims, March personal income and consumption and a reading from the Chicago Institute of Supply Management on manufacturing activity.
Shares in Bank of America Corp
In the auto sector, Chrysler LLC rushed to secure deals in a last-minute attempt to avoid bankruptcy ahead of a government-imposed midnight restructuring deadline.
Chrysler, the third-largest U.S. automaker still has not gained the bondholder support it needs to avoid the first-ever bankruptcy filing for a Detroit Three automaker.
Worries over the economic implications of spreading swine flu could hamper the market after Mexican President Felipe Calderon urged people to stay home from Friday for a five-day partial shutdown of the economy, after the World Health Organization said a swine flu pandemic was imminent.
S&P 500 futures rose 14 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 climbed 116 points, and Nasdaq 100 futures added 24.50 points.
Dow component Procter & Gamble Co
In the same sector, Colgate-Palmolive Co
Cell phone maker Motorola Inc
On Wednesday, the S&P 500 broke through significant resistance at around the 875 level, a key technical point the index had tried but failed to break in recent days.
There was a resistance point around the 875-877 level that we took out intraday yesterday, which really set us up technically for a rally. Once we break through that point and close above it, the next resistance is up around the 920 level, said Windham Financial's Mendelsohn.
(Reporting by Leah Schnurr; editing by Jeffrey Benkoe)