Wall Street was poised to open modestly higher on Thursday after data showed the number of people filing for jobless benefits fell last week, while stocks eyed their best yearly gains since 2003.
Initial jobless claims for state unemployment fell to their lowest level in about 17 months last week. The high unemployment rate poses a potential hurdle for a nascent recovery, and investors are eager to see signs of stabilization.
The general idea that the labor market is getting less bad remains unchanged, said Dan Greenhaus, analyst at Miller Tabak & Co in New York, though he noted the numbers were skewed by seasonal factors.
Going into the final trading day of the year, the broad S&P 500 is up nearly 25 percent for 2009, on track for its best performance since 2003. The gains come on the heels of a 38.5 percent slide in 2008, Wall Street's worst year since the Great Depression.
S&P 500 futures rose 2.9 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 10 points and the Nasdaq 100 futures added 1.25 points.
Volume is expected to be light Thursday, with many investors out for the holidays. The market is closed Friday for New Year's Day.
It's been such a furious rally from the March lows that the last couple days have had the same pattern of investor exhaustion, said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
Most of this year's surge came in a nine-month rally that started in March, as investors turned bullish on an economic recovery. The S&P is up 66.5 percent from March's 12-year low.
In a reminder the economy and the financial system are both still fragile, the U.S. government is injecting another $3.8 billion into GMAC Financial Services to help cover mortgage losses. The bailout makes the government the majority owner of the auto and home finance company.
(Additional reporting by Ryan Vlastelica; editing by Jeffrey Benkoe)