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) -- Stock futures pointed to a largely flat open Thursday as the market weighed a larger-than-expected drop in initial jobless claims against fears that China would raise interest rates to cool growth.

Futures for the

Dow Jones Industrial Average

were down by 10 points, or 0.3 of a point below fair value, at 11,776. Futures for the

S&P 500

were unchanged, or 0.2 of a point above fair value, at 1279, and


futures were ahead by half of a point, or 7 points below fair value.

Initial jobless claims shed 37,000 to 404,000 in the week ended Jan. 15, from 441,000, previously. The drop was larger than the decline of 20,000 claims that analysts had expected.

Global markets weakened on news that

China's economy grew 9.8% in 2010's fourth-quarter compared with third-quarter growth of 9.6%, triggering concern that China would enact further monetary policy tightening.

Hong Kong's Hang Seng lost 1.7% and Japan's Nikkei declined 1.1%. London's FTSE was losing 1.4% and the DAX in Frankfurt was down by 0.6%.

Morgan Stanley

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reported adjusted earnings of 43 cents a share, topping the profit of 35 cents a share that Wall Street had forecast. Revenue was also better than expected at $7.8 billion, compared with the $7.4 billion expected by analysts. The stock was gaining 4.1% at $28.88 in early trading.

Southwest Airlines

(LUV) - Get Southwest Airlines Co. Report

saw its stock rise 2.5% to $13.15 early Thursday after it met analysts' top- and bottom-line estimates with adjusted earnings of 15 cents a share on sales of $3.1 billion.

Shares of


(EBAY) - Get eBay Inc. Report

were trading 2.1% higher at $29.70 ahead of Thursday's opening bell after the

online marketplace operator topped Wall Street's profit estimates and met sales expectations for the fourth quarter late Wednesday.


(UNH) - Get UnitedHealth Group Incorporated Report

said it

earned 94 cents in the fourth quarter on revenue of $24.03 billion, compared with a profit of 84 cents a share and revenue of $23.75 billion that analysts had been expecting. The company also affirmed its 2011 guidance for net earnings of $3.50 to $3.70 a share. The stock was down 0.02% at $40.55 during premarket trading.

Shares of biopharmaceutical company


(MNKD) - Get MannKind Corporation Report

were down 43% at $5.17 on news that

U.S. regulators rejected Afrezza, an inhaled insulin delivery device for diabetes, telling the company to conduct at least two more clinical trials before resubmitting for approval.

At 10 a.m., the National Association of Realtors will report on existing home sales for December. The market is expecting an increase to 4.8 million, from 4.68 million in November.

At the same time, the Conference Board will release December leading indicators data. According to

, economists anticipate a 0.6% uptick after an increase of 1.1% in November.

Also at 10, Philadelphia's Federal Reserve Bank will report on regional manufacturing activity in January. Wall Street expects the Philly Fed index to come in at 20, compared with December's reading of 24.3.

The Energy Information Administration will issue its weekly read on energy inventories at 11 a.m. The report was delayed by the Martin Luther King Jr. Day holiday on Monday. Analysts expect a decline of 2.2 million barrels in crude supplies in the week ended Jan. 14, according to a Platts poll.

Late Wednesday, the American Petroleum Institute reported an increase of 3.53 million barrels in crude stockpiles.

The March crude oil contract was trading 78 cents lower at $91.03 a barrel.

Elsewhere in the commodity markets, the February gold contract was down by $14.70 to trade at $1,355.50 an ounce.

The dollar strengthened slightly against a basket of currencies with the dollar index up by 0.02%. The benchmark 10-year Treasury note fell 6/32, lifting the yield to 3.361%.


--Written by Melinda Peer in New York


Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.