(Updates with jobless claims, AT&T)
By Kristina Cooke
NEW YORK, Jan 24 (Reuters) -U.S. stocks headed for a higher
open on Thursday, buoyed by a government report suggesting
strength in the labor market and optimism about government and
central bank efforts to boost the economy.
The number of U.S. workers applying for jobless benefits
fell unexpectedly last week to the lowest level in four months,
the data showed.
S&P 500 futures <SPc1> were up 6.70 points, above fair
value, a mathematical formula that evaluates pricing by taking
into account interest rates, dividends and time to expiration
on the contract.
Dow Jones industrial average futures <DJc1> were up 39
points. Nasdaq 100 <NDc1> futures rose 5 points.
U.S. stocks snapped a five-day losing streak on Wednesday,
with the Dow surging nearly 300 points on optimism that a New
York state government-led effort to rescue ailing bond insurers
is taking shape and could prevent billions more in credit
losses.
The market also drew support from growing expectation that
aggressive interest-rate cuts by the Federal Reserve could help
stabilize the economy and support the beleaguered banking
sector.
"Jobless claims were a little bit better than expected. A
lot of investors and traders are looking at that number as an
indicator for the economy right now, especially with this week
being light on economic data," said Cleveland Rueckert, market
analyst at Birinyi Associates Inc. in Stamford, Connecticut.
Rueckert said he expected U.S. stocks to rally on Tuesday's
surprise 75-basis-point interest-rate cut from the Federal
Reserve.
Shares of AT&T Inc <T.N> rose 2.9 percent to $27.60 after
the biggest U.S. telephone company posted a higher quarterly
profit as strength in its wireless business offset weakness in
traditional consumer services. For details, see
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Even so, technology shares could be under pressure after
eBay Inc <EBAY.O>, the Internet auctioneer and retailer, warned
about its profit outlook late on Wednesday. EBay shares fell
11 percent to $25.77 before the bell. [].
Bond insurer MBIA Inc <MBI.N> rose 6.8 percent to $17.74
before the bell, while rival Ambac Financial Group <ABK.N>
jumped 5.8 percent to $14.50. From its peak last May, Ambac has
lost 86 percent of its value, or $8.4 billion in market
capitalization. MBIA, meanwhile, is down 77 percent, or $7.45
billion from its end-2006 peak.
New York's insurance regulator pressed major banks on
Wednesday to put up billions of dollars to support wobbly bond
insurers. [].
Bond insurers have become the latest sector to worry
investors in the credit crisis. The debt they underwrite shares
the top rating of many of these firms, so if the firms are
downgraded because of losses, the debt rating goes too. This
would force investors to sell, dumping billions of dollars of
municipal bonds, repackaged loans and the like onto markets,
sending borrowing costs soaring and forcing more investor
write-downs.
Shares of Qualcomm Inc <QCOM.O> rose 8.1 percent to $39.60
after the mobile phone chip maker posted an 18 percent rise in
quarterly profit and gave an outlook that matched analyst
estimates. [].
(Additional reporting by Ellis Mnyandu; Editing by Kenneth
Barry)
