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Stock Futures Climb Following Jobs Data

Mike Taylor

Stock futures turned higher ahead of a truncated Thursday session as the government's monthly jobs data registered a more benign reading than many traders had been fearing.

Futures for the S&P 500 were up 8 points at 1271 and were 9 points ahead of fair value. Nasdaq futures were better by 6 points at 1831 and were 7 points below fair value.

The mood improved after the Labor Department said the U.S. shed 62,000 last month, roughly in line with the consensus target for a 55,000 decline. The unemployment rate stayed at 5.5%, whereas a downtick to 5.4% had been expected.

At the same time, the data for the prior two months were revised lower by a combined 52,000 workers. On the whole, traders reacted positively to the news and bid up equities, even overlooking an increase in weekly initial jobless claims to 404,000. The session will end at 1 p.m. EDT, and U.S. trading will be suspended Friday for the Independence Day holiday.

Lately, crude oil was up $1.68 at $145.25 a barrel, passing the $145 mark for the first time in history. The European Central Bank, as expected, raised its benchmark lending rate by a quarter-point, which will likely weaken the dollar and further drive up the price of oil. Ongoing fear of a conflict with Iran over its nuclear program and yesterday's report of lower-than-expected U.S. crude inventories have also contributed to oil's recent rise. Gold was recently down $4.20 at $9.42.

A little later, the Institute for Supply Management's nonmanufacturing report is due.

As for companies, Citigroup said that UBS (UBS Quote) is set to write down $6.9 billion in assets and will need to raise fresh capital. UBS had said Wednesday that it would not require additional liquidity.

In the technology space, The Wall Street Journal reported that Internet company Yahoo! (YHOO Quote) is in talks with Time Warner (TWX Quote) about a deal with that company's AOL unit. On Wednesday, the Journal reported that Microsoft (MSFT Quote) was still interested in finding a way to gain control of Yahoo! after a failed bid earlier this year.

Late Wednesday, semiconductor maker Nvidia (MSFT Quote) offered a gloomy second-quarter forecast owing to flaws in some of its microchips.

Treasuries were narrowly mixed. The 10-year note was up 1/32, yielding 3.95%, and the 30-year was down 3/32, yielding 4.51%. The dollar was gaining against the yen, euro and pound.

Overseas markets were lower across the board. The FTSE of London, the DAX of Frankfurt, the Nikkei in Japan and Hong Kong's Hang Seng were all trading lower.