Stocks headed for a sharply higher open on Thursday following a string of stronger-than-expected quarterly corporate profits, a broker upgrade for General Electric Co
The magnitude of the gains in stock index futures suggested that the benchmark S&P 500 <.SPX> might open near its highest level in about nine months, extending a run-up from the 12-year lows of early March.
Companies posting solid results before the bell included mobile phone maker Motorola Inc
Also likely to set the market's tone is a record $28 billion 7-year note auction from the U.S. Treasury, though investors could be cautious following poor demand for two government auctions earlier this week.
Sentiment was boosted by a government report that showed a gauge of underlying labor trends fell for a fifth-straight week even as the number of new claims for jobless benefits rose slightly more than expected.
These numbers are consistent with the view that the economy, as measured by employment, continues to lose jobs, or recede, but perhaps at a slower pace, said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.
S&P 500 futures rose 9.80 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 76 points, and Nasdaq 100 futures were 16 points higher.
Goldman Sachs raised its recommendation on General Electric
U.S. House Financial Services Committee Chairman Barney Frank in an interview with Bloomberg late on Wednesday suggested there was broadening support for regulatory reform that would not mandate the separation of GE Capital, Goldman analysts said.
GE shares rose 6.5 percent to $13.06 before the bell.
Signs that the economic slump also emerged from Europe, where data showed July euro zone economic sentiment rose to its highest level in eight months, while German unemployment unexpectedly fell for the first time in July.
(Additional reporting by Chuck Mikolajczak; Editing by Padraic Cassidy)