By Anna Hirtenstein
U.S. stock futures edged up Thursday ahead of fresh data that is likely to show the number of people seeking unemployment benefits remains elevated.
Futures tied to the S&P 500 ticked up less than 0.1%, suggesting a tepid advance after the opening bell following three days of gains. Contracts linked to the Nasdaq-100 Index climbed 0.3%, pointing to a rise in technology stocks.
Investors are watching for signs that the economic recovery remains under way despite a high number of Covid-19 cases and new variants that existing inoculations may be less effective against. A handful of stocks that grew popular on online forums and posted big swings in recent days have also calmed. Meanwhile, vaccine rollouts are ramping up in the U.S., offering hope that there may be a sharp rebound later in the year.
"The move now is for cautious optimism: the market is turning back to fundamentals," said Grace Peters, an investment strategist at J.P. Morgan Private Bank. "Volatility is here to stay, but markets will ultimately grind higher."
Jobless claims data, due to be released at 8:30 a.m. ET, is likely to show that initial applications declined to 830,000 last week, from 847,000 the week before, according to economists surveyed by The Wall Street Journal. Cold weather, a surge in Covid-19 case numbers and the threat of a new, highly contagious variant of the virus have contributed to a broader winter slowdown that has hindered the labor market's recovery, economists say.
Investors are also awaiting next steps on a new fiscal stimulus package in the U.S. In a Wednesday evening call with House Democrats, President Biden said he's willing to send the next round of checks to a smaller, more targeted group of people.
"I think that flexibility is a good thing," said Mrs. Peters, since it could improve the chances of passing the next stimulus bill in a timely manner.
"The market is expecting around $1 trillion, anything more than that could be positive for equities," she added. "This is one of the tailwinds we're looking for to support growth through the second quarter and beyond."
Earnings season continues, with Carlyle Group, Bristol-Myers Squibb and Philip Morris International scheduled to report ahead of the opening bell. Ford Motor and Snap, which owns the Snapchat social media app, are slated to post earnings after markets close.
In bond markets, the 10-year U.S. Treasury yield ticked up to 1.135%, from 1.129% on Wednesday.
In commodities, silver declined 1.4% following a bout of volatility earlier in the week. Brent crude, a global benchmark for oil prices, ticked up 0.5% to its highest level since the pandemic began last spring.
Oil prices have been buoyed by OPEC's statement Wednesday asking countries to stick with production cuts given the uncertain market conditions, said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB Group.
"What they are doing is driving down inventories and driving prices higher," Mr. Schieldrop said.
Overseas, the pan-continental Stoxx Europe 600 advanced 0.2%.
Among European equities, Commerzbank retreated nearly 4% after it said it would post a EUR2.9 billion ($3.5 billion) loss for 2020 and confirmed plans to cut 10,000 jobs. Bayer rose 5.3% after it set forward a $2 billion proposal to pay farmers and gardeners who claim that its Roundup weedkiller causes cancer in a bid to limit its liability. Unilever slipped 3.9% after it reported a drop in net profit for 2020, missing analysts' expectations.
The Bank of England will release its latest monetary policy report at 7 a.m. ET. Economists widely expect the central bank will keep its key interest rate at 0.1%, analysts said. Investors are watching for any commentary on the possibility of introducing negative interest rates in the U.K.
The central bank is "in wait-and-see mode, ready to support more if things continue to be ugly out there," said Olivier Marciot, a cross asset fund manager at Unigestion. "If anything, the BOE could be more dovish if we were to get a surprise."
In Asia, most major benchmarks declined by the close of trading. Japan's Nikkei 225 fell 1.1%, while the Shanghai Composite Index slipped 0.4%. South Korea's Kospi Index closed down 1.4%, weighed by losses in tech stocks.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
02-04-21 0528ET
