Stocks were set to rise at the open on Thursday after Bank of America and Morgan Stanley reported earnings and as strong demand at European bond auctions lessened euro zone debt concerns.

Bank of America Corp climbed 5.6 percent to $7.18 after it reported a fourth-quarter profit, reversing a year-earlier loss, boosted by one-time items and lower expenses for bad loans.

Fellow financial Morgan Stanley jumped 6.9 percent to $18.55 after it posted a quarterly loss but still managed to top analysts' expectations.

Financial shares have rallied since the start of the year. The S&P financial index <.GSPF> is up more than 7 percent for 2012, helping to push the benchmark S&P 500 index up 4 percent.

In a sign that investor nervousness over the euro zone's debt crisis was easing, Spain and France both drew strong demand at government debt auctions.

It's a combination of no horror stories out of Europe and it is earnings season. We are up and down with the different earnings releases, of course, but in general they are expected to be good, said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

Overall, earnings are expected to be positive and a positive influence for the market.

Talks between Greece and its creditors were proceeding, sources said, but much more progress was needed before a deal could be reached on a bond swap.

The latest data generally supported the view the U.S. economy continued to improve at a moderate pace. New jobless claims dropped to a near four-year low last week and consumer prices showed inflation remained in check, although housing starts dipped.

S&P 500 futures rose 3.9 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 added 35 points, and Nasdaq 100 futures gained 9.75 points.

Freeport-McMoRan Copper & Gold Inc advanced 1 percent to $44.90 premarket after it reported fourth-quarter profit dropped sharply but still beat expectations.

After the close, quarterly reports are due from technology bellwethers Google Inc , International Business Machines Corp , Intel Corp as well as Microsoft Corp .

Late Wednesday, eBay Inc reported better-than-expected results, but gave a conservative sales forecast, citing a weak European economy. The stock was up 3.6 percent to $31.42 premarket.

Eastman Kodak Co shares were halted after it filed for bankruptcy protection.

(Reporting By Chuck Mikolajczak; editing by Jeffrey Benkoe)

Morgan Stanley Citigroup