NEW YORK (Reuters) – Stock index futures rose on Thursday ahead of job market data a day after major equity indexes posted their largest drops in months.
Equities slumped more than 2 percent Wednesday as investor focus returned to Europe’s economic troubles and as the electoral victory by President Barack Obama turned markets’ focus to the looming “fiscal cliff.”
Investors worry that if no deal is agreed in Congress over some $ 600 billion in spending cuts and tax increases due to kick in early next year, it could derail the U.S. economic recovery.
“To the extent we start to see some clarification of what (Congress) is thinking about, whatever it may be, it will provide some confidence,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey.
He said the open-ended nature of what the fix may be for taxes has flooded markets with uncertainty.
Futures added to early gains as the euro slightly cut losses versus the U.S. dollar after the European Central Bank held its main interest rate at 0.75 percent, despite dovish comments Wednesday from ECB president Mario Draghi that stirred market rumors of a rate cut.
A rise in the U.S. dollar also weighed on equities Wednesday.
S&P 500 futures rose 4.8 points and were up in terms of 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 22 points and Nasdaq 100 futures rose 9 point.
Wednesday’s retreat marked the biggest daily drop for the S&P 500 since June 1; the index closed below the key 1,400 level for the first time since August 30. Despite Wednesday’s selloff, the benchmark S&P 500 is still up more than 10 percent so far this year.
The latest reading on the labor market will come with the release of weekly jobless claims, due at 8:30 a.m. (1330 GMT).
Qualcomm Inc late Wednesday reported quarterly revenue that beat expectations, sending shares up more than 7 percent in premarket trading.
Whole Foods Market Inc reported earnings that met expectations but its shares fell 3 percent before the market opened.
(Editing by Kenneth Barry)
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