Wall Street flat-lined at the open on Thursday after a report suggested a much anticipated European summit on resolving the region's debt crisis may be postponed, but investors looking for a U.S. earnings season rally put a floor under the market.
A report in German newspaper Die Welt said the German government does not rule out the possibility of postponing the European Union summit planned for this Sunday. Investors are hoping EU leaders will move toward a solution this weekend, a key factor for stocks to break out of their trading range.
At the same time, investors are closely watching the developing U.S. earnings season. Many are betting a strong performance will power equities into the end of the year in a move that will lift stocks out of their trading range and Thursday's results did not dispel that expectation.
Philip Morris International Inc (PM.N) shares rose 2.5 percent to $67.69 after the tobacco company posted results.
The world's largest cellphone maker Nokia reported a smaller than expected fall in third quarter profits as price cuts and new models lifted sales in key markets like India. The U.S.-listed shares (NOK.N) jumped 8.5 percent to $6.64.
The earnings are giving the bulls a very solid piece of data from which to make a stand, said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.
The S&P 500 has struggled after reaching the top end of a two-month trading range at around the 1,230-1,250 level and progress on Europe's debt crisis is critical to breaking out of that range.
On the economic data front, new U.S. claims for unemployment benefits fell last week and the four-week moving average, considered a better gauge of labor market trends, hit a six-month low, a government report showed on Thursday, pointing to an improvement in the jobs market.