Stocks were set to rise slightly at the open on Thursday after futures pared gains following an unexpected rise in initial jobless claims in the latest week.
Equities were supported by a tick down in benchmark bond yields in Italy and Spain that signaled easing concern about the euro zone's debt troubles.
New claims for unemployment benefits rose last week to their highest level since January, a development that could raise fears the labor market recovery was stalling after job creation slowed in March.
Jobless claims came in higher than expected, but it doesn't change the trend, said Peter Cardillo, chief market economist at Rockwell Global Capital, New York, citing seasonal and holiday variables for the unexpected rise in claims.
If the economic outlook does worsen U.S. policymakers are ready to deploy a third round of asset purchases, said New York Federal Reserve Bank president William Dudley.
Previous rounds of quantitative easing have been a boost for equities and other risk assets.
S&P 500 futures rose 1.3 points and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures added 26 points and Nasdaq 100 futures rose 6.5 points.
S&P 500 futures hit a session high just below their 50-day moving average, a level that also provided resistance Wednesday in the cash market and could become a key technical hurdle.
Italian three-year borrowing costs jumped more than one percentage point at a bond auction compared to a month ago, but 10-year yields in both Italy and Spain edged lower for the day and the euro strengthened, as concerns over the region's debt seemed to ease.
Auctions (in Europe) have not been disastrous and that was good enough, said Art Hogan, managing director at Lazard Capital Markets in New York. Yields are not optimal but good enough to not cause panic.
A recent spike in borrowing costs in Spain and Italy reminded investors the debt crisis in the euro zone is not under control.
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On Wednesday, U.S. stocks rose after five days of declines on the S&P 500 and the Dow industrials. An encouraging start to the earnings season contributed to the rebound, but the S&P 500 was unable to rise back above its 50-day moving average.
The Dow Jones industrial average <.DJI> rose 89.46 points, or 0.70 percent, to 12,805.39 at the close. The S&P 500 Index <.SPX> gained 10.12 points, or 0.74 percent, to 1,368.71. The Nasdaq Composite <.IXIC> advanced 25.24 points, or 0.84 percent, to 3,016.46.
(Reporting by Rodrigo Campos, additional reporting by Angela Moon; editing by Theodore d'Afflisio)