Stock futures climb after surprising profit from Alcoa; ahead of weekly jobless report

Stocks futures point to sharply higher opening

NEW YORK — Stock futures are pointing to a sharply higher opening Thursday after Alcoa kicked off earnings season with an unexpected profit, helping to boost investors’ hopes for an economic recovery.

Investors are also awaiting a weekly report on jobless claims and same-store sales data from retailers for signs of economic improvement.

Overseas markets rose following the upbeat report from Alcoa.

Aluminum company Alcoa Inc. surprised investors after the market closed Wednesday by reporting its first profit in nine months. The profit of $77 million, or 8 cents per share, was due to cost cutting and rising sales to automakers. Alcoa also said worldwide aluminum demand is expected to increase by 11 percent for the second half of the year.

Traditionally the company to start earnings season, Alcoa’s better-than-expected report and upbeat demand prediction reassured investors that the economic recovery is well under way.

Investors will be examining earnings reports in upcoming weeks for more signs of growth in the economy. Companies mostly beat modest earnings expectations during the second quarter because of cost-cutting measures. Now investors will want to see revenue and sales growth to help justify the market’s strength in recent months.

Any forecasts from companies will also be closely watched to see where executives believe the economy is headed.

Ahead of Thursday’s market opening, Dow Jones industrial average futures rose 77, or 0.8 percent, to 9,750. Standard & Poor’s 500 index futures rose 9.00, or 0.9 percent, to 1,063.00, while Nasdaq 100 index futures rose 12.25, or 0.7 percent, to 1,720.25.

A weekly report on jobless claims, due out from the Labor Department at 8:30 a.m. EDT, could provide further fuel to the market ahead of the opening bell. Economists, polled by Thomson Reuters, predict the number of newly laid-off workers seeking unemployment benefits dropped last week to a seasonally adjusted 540,000 from 551,000 the previous week.

New jobless claims have been slowly improving since the spring, but still remain far from what is considered normal for a healthy economy.

Amid concerns about work, consumers have been reluctant to start spending again. Retailers report sales data throughout the morning, providing insight into whether consumers are getting more comfortable with the employment situation and spending again.

Consumer spending accounts for more than two-thirds of all economic activity, so an uptick in retail sales would provide further evidence of a rebound.

Stocks took a break Wednesday after two strong days of gains. The Dow fell 0.1 percent, while the S&P gained 0.3 percent. Traders treaded lightly ahead of the beginning of earnings season, not wanting to make big bets before companies begin to show their strength or weakness during the July-September quarter.

Meanwhile, bond prices fell slightly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.20 percent from 3.19 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.07 percent from 0.05 percent.

The dollar continued its fall against other major currencies. Gold prices continued to climb higher on the weakness of the dollar. Gold again hit a new record Thursday morning, rising as high as $1,059.60 an ounce.

Overseas, Japan’s Nikkei stock average rose 0.3 percent. In afternoon trading, Britain’s FTSE 100 gained 0.6 percent, Germany’s DAX index rose 1.2 percent, and France’s CAC-40 jumped 1.2 percent.