Stocks were set to open little changed on Thursday as investors grappled with euro zone uncertainty, a raft of corporate earnings and softer-than-expected data on the domestic labor market.
Futures initially pointed to a higher open after Spain sold all of its debt at an auction and after solid earnings from Bank of America and Morgan Stanley.
But indexes quickly erased gains as speculation swirled that France's sovereign debt rating may be downgraded. A senior French source told Reuters the rumors were unfounded.
Traders could not pinpoint the source of the chatter, but the drop in futures highlighted continued sensitivity to the region's debt crisis.
The FTSEurofirst 300 <.FTEU3> index of top European shares fell from earlier highs and were flat.
S&P 500 futures added 1.9 points and were slightly below 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 gained 6 points, and Nasdaq 100 futures advanced 6.25 points.
Spain, the latest trouble spot in the euro zone debt crisis, sold 2.5 billion euros ($3.3 billion) of bonds, but yields rose as Madrid struggled to tame its deficit.
The ECB's efforts to pump liquidity into the system has taken fears of a banking crisis off the table, but all the problems are still there for all these countries, said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
For U.S. investors, it's just going to be simmering on the back burner, maybe it comes to the front burner, and back and forth. It's still going to be a major issue and is not going to go away anytime soon.
New claims for unemployment benefits fell less than forecast last week, Labor Department data showed, tempering expectations for a pick-up in job creation in April after March's slowdown.
The claims numbers at face value, sure it's a disappointment for the stock market. It's certainly going to take the wind out of the sails as we head to the open. We really need to see another week or two before we conclude the labor market is slowing down considerably, so I take it with a big grain of salt, said Brown.
Bank of America Corp
DuPont and Co's
Verizon Communications Inc
According to Thomson Reuters data, 35 companies in the S&P 500 are due to report Thursday. Notables after the close include Microsoft Corp
Of the 56 S&P 500 companies reporting through Wednesday morning, 79 percent beat estimates.
Due at 10 a.m. EDT (1400 GMT) are the Philadelphia Federal Reserve Bank's April business activity index, the Conference Board's leading economic indicators for March and existing home sales for March from the National Association of Realtors.
Biotechnology company Human Genome Sciences Inc
CVR Energy Inc
(Reporting By Chuck Mikolajczak; editing by Jeffrey Benkoe)