(Adding market commentary, jobless data, ECB decision and Home Depot)
NEW YORK (AFX) - US stock futures were pointing to a slightly higher open after a sharper-than-expected drop in weekly jobless claims, but a profit warning from Hershey and a disappointing earnings outlook from Eli Lilly are likely to give investors some pause for thought.
Dow futures were up 14 points at 12,340, Nasdaq 100 futures were up 2.75 points at 1,804 while S&P 500 futures tacked on 1.10 points to 1,415.80.
'The feel of the market is still toward an upward bias, with some cautious anticipation ahead of tomorrow's employment report.' said Robert Pavlik, chief investment officer at Oaktree Asset Management.
Pavlik said Hershey's profit warning and Eli Lilly's outlook are really only of concern to those investors who hold those particular stocks.
Yesterday, stocks snapped a two-session run of gains, led by weakness in the technology sector, with Yahoo Inc a notable decliner as its reorganisation plans received a lukewarm reception.
Stocks futures extended early gains as concerns about a slowing economy eased after weekly jobless claims fell more sharply than expected.
First time claims fell 34,000 to 324,000 in the week ended Dec 2 after spiking up in the previous week, the Labor department said. Economists had expected about 330,00 new claims.
But it's the November employment report due out at 8.30 am on Friday that remains the main focus for investors.
Expectations are that the economy created 115,000 jobs in November, up from 92,000 in October. The unemployment rate is forecast to remain unchanged at 4.4 pct.
Investors worried that economic growth is slowing at a far greater pace than initially anticipated will be looking for solid job creation figures from last month to ease their fears.
In the currency markets, the euro made modest inroads into the US dollar as the European Central Bank, in a widely-expected move, raised borrowing costs by a quarter point to 3.50 pct.
Against the Japanese yen, the dollar fell 0.3 pct to 114.98 while the British pound traded little changed against the greenback to trade at 1.9655 after the Bank of England kept its benchmark repo rate unchanged at 5.00 pct today, in line with expectations.
Gold futures edged higher in early trading, recouping heavy losses in the prior session that saw the precious metal slide to near two-week lows. The benchmark February contract was last up 60 cents at 636.50 usd.
Crude edged up on concerns over falling US energy inventories, the possibility of further OPEC output cuts and news of yet another attack against oil workers in top producer Nigeria.
Gains were limited, however, by expectations that warmer than average temperatures in northeast US over the next week will reduce demand for heating oil in the world's top energy consumer.
US light sweet crude for January delivery was up 20 cents at 62.39 usd a barrel in electronic trading.
In company news, Eli Lilly was down 0.7 pct at 54.50 usd in pre-market trading after the drug giant reiterated its current year estimates, but offered a 2007 earnings outlook below current Wall Street expectations.
On a more positive note for Eli, the company submitted a New Drug Application to the US Food and Drug Administration for Evista -- which prevents and treats osteoporosis in women post menopause.
Hershey's fell 3.1 pct to 49.50 usd after the sweet and chocolate manufacturer cut its 2006 earnings estimates for the second time in two months following sluggish sales and a product recall in Canada.
The lowered forecast prompted broker Goldman Sachs to downgrade the company to 'neutral' from 'buy'.
Home Depot was down 0.6 pct at 39.70 usd in pre-market dealings after the home improvement retailer late Wednesday said an internal investigation of the company's stock option practices has concluded that errors caused it to have roughly 200 mln usd in unrecorded option expenses over a 26-year period.
Elsewhere, Rupert Murdoch's News Corp is set to transfer its controlling stake in satellite broadcaster DirecTV Group Inc to Liberty Media as part of a deal to buy News Corp stock back from Liberty, according to a published report.
An article on The New York Times' website said Liberty will get DirecTV, three regional sports networks and 550 mln usd in cash for its News Corp shares under a deal brokered yesterday between Murdoch and Liberty's Chairman John Malone.
In return, New York-based Liberty would give up its 19 pct voting stake and 15 pct non-voting stake in News Corp, the newspaper reported, citing a banker and an executive close to the deal.
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