Stock futures strengthen after labor market data

By Andrea Tse

U.S. stock futures were gaining ground Thursday as investors cheered a better-than-expected​ report on labor market conditions and shrugged off Standard & Poor's two-notch downgrade of Spain's debt.

Moody's, which already has Spain on watch to be downgraded to junk status, will likely go next, according to Stephen Guilfoyle, U.S. economist at Meridian Equity Partners.

 "The perception … is that this or these downgrades make it that much easier for Spain to ask for the help they need when their huge debt bill comes due in about 10 days," said  Guilfoyle. "By Spain asking for help, the ESM can then purchase Spanish sovereign debt in the primary market, and the ECB can then activate their OMT program to buy said debt in the secondary market. The provided liquidity will take the pressure off of the throat of Spain, at least for now, kicking that proverbial can a much further ways down that road."

 "Thus, relief."

Market sentiment also got an early boost with Citigroup strategists raising their recommendation on U.S. equities to overweight and calling for a global rally through the end of 2013, citing a combination of strong earnings per share momentum and aggressive central bank stimulus plans.

Futures for the Dow Jones Industrial Average ($INDU) were up by 51 points at 13,319. S&P 500 ($INX) futures were up by 7.4 points at 1,433. Futures for the Nasdaq ($COMPX) were rising by 16.75 points to 2,739.

The Labor Department reported that initial jobless claims in the week ended Oct. 6 fell 30,000 to 339,000 from the previous week's upwardly-revised figure of 369,000, the lowest level since Feb. 2008.

The four-week moving average was 364,000, a decrease of 11,500 from the prior week's average of 375,500.

Continuing claims for the week ended Sept. 29 was 3.273 million, a decrease of 15,000 from the preceding week's upwardly-revised level of 3.288 million.

Economists on average predicted initial jobless claims of 370,000 and continuing claims of 3.275 million.

The Census Bureau reported that the U.S. trade deficit widened to $44.22 billion in August from $42.47 billion in July. Economists were expecting a U.S. trade deficit of $44 billion.

The Bureau of Labor Statistics said that U.S. import prices rose 1.1% in September versus 1.1% in August and that export prices increased 0.8% in September compared with 1% in August.

The major U.S. equity averages finished sharply lower on Wednesday as the early results for third-quarter reporting season exacerbated investor worries about a slowing global economy.

The FTSE 100 in London was up 0.46% and the DAX in Germany was higher by 0.66% Thursday. The Nikkei Average in Tokyo closed down 0.58% and the Hang Seng in Hong Kong finished up 0.38%.

November crude oil futures were rising 62 cents at $91.87 a barrel. December gold futures were adding $5.80 at $1,770.90 an ounce.

The benchmark 10-year Treasury was down 4/32, lifting the yield to 1.693%. The dollar was up 0.02%, according to the dollar index.

In corporate news, JPMorgan Chase's (JPM) chief financial officer, Douglas Braunstein, is expected to step down over the next two quarters and is likely to move into a different job at the bank, The Wall Street Journal reported, citing people close to the company.

Caterpillar (CAT) stock was cut to sector perform from outperform at RBC Capital, whose analysts pointed to high inventory levels for both the company and the earth-moving equipment industry as a whole, and sluggishness in Europe and China.

Ruby Tuesday (RT), the restaurant operator, reported an in-line profit for its fiscal first quarter on Wednesday but gave an outlook that hints at some downside to Wall Street expectations for the full year.

Hewlett-Packard's (HPQ)  position as the top seller of personal computers has come to an end with Lenovo as the new leader, according to Gartner figures.

Alaska Air (ALK) announced Thursday an agreement to buy 50 Boeing (BA) 737 aircraft with the ability to purchase an additional 62 aircraft through options and purchase rights.

Soft drink giant Coca-Cola (KO) is reportedly is in talks to invest around $10 million in subscription music-streaming service Spotify.

Walt Disney (DIS) is facing a lawsuit by Stan Lee Media over rights to Marvel characters such as Spider-Man and Iron Man.

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