Stimulus hopes set to lift Wall Street as labor market rebound slows

Wall Street's main indexes were set to open slightly higher on Thursday, as investors held out for a new coronavirus relief package with data signaling that a recovery in the labor market was stalling.

The number of Americans filing for unemployment benefits rose last week for the first time in nearly four months, a report from the Labor Department showed.

"The monetary taps are on and are likely remain so while unemployment is so high and this should continue to support markets," said Geir Lode, head of global equities, International at Federated Hermes in London.

Leading US Senate Republicans and the White House late on Wednesday said they had hammered out agreements in principle on portions of a potential coronavirus-response bill, as lawmakers raced to pass legislation by the end of July.

Optimism about a potential vaccine, fiscal stimulus and improving economic data has helped the benchmark S&P 500 recoup most of its virus-induced losses and rise 1.4 per cent this year. The blue-chip Dow is still down about 5 per cent year-to-date, while the tech-heavy Nasdaq has climbed about 19 per cent.

Of the 75 S&P 500 companies that have reported quarterly results, 77.3 per cent of them have beaten dramatically lowered profit estimates, according to IBES Refinitiv data.

Tesla Inc rose 4.2 per cent premarket after posting a fourth consecutive quarterly profit, clearing a hurdle that could lead to the electric carmaker's inclusion in the S&P 500 index.

Twitter Inc jumped 6 per cent as it reported a bigger-than-expected yearly growth of daily users even as ad sales sank.

Microsoft Corp fell 1.6 per cent as its flagship cloud computing business Azure reported quarterly sales growth of under 50 per cent for the first time ever.

"Many continue to believe there will be a V-shaped recovery, although it remains too early to say whether the earnings season will add weight to that view or not," Lode added.

California on Wednesday overtook New York as the worst-hit state for cases as US deaths from the novel coronavirus rose by more than 1,100 for a second day in a row.

At 8:44 a.m. ET, Dow e-minis were up 20 points, or 0.07 per cent, S&P 500 e-minis were up 4.25 points, or 0.13 per cent and Nasdaq 100 e-minis were up 62.75 points, or 0.58 per cent.

Home builder PulteGroup Inc jumped about 5 per cent after posting a higher quarterly profit.

Southwest Airlines Co dipped 0.7 per cent as the carrier said it was rethinking the number of flights it had planned to add in August and September amid a high cash burn.

In contrast, American Airlines Group Inc and Alaska Air Group Inc gained about 0.5 per cent after posting their results.