Stocks set to climb after more upbeat earnings

[October 21, 2010]  NEW YORK (AP) -- Stocks were set to extend their gains Thursday after another batch of strong earnings reports.

Both online marketplace operator eBay Inc. and video subscription service provider Netflix Inc. reported upbeat quarterly results after the market closed Wednesday. Their shares jumped in pre-opening trading Thursday and helped drive the technology-heavy Nasdaq 100 index futures higher.

Earnings at Travelers Inc. easily beat analysts' expectations. The insurer, which is a component of the Dow Jones industrial average, also raised its earnings outlook for the year.

Traders get the chance to sift through more earnings throughout the day, including from industry bellwethers UPS Inc., Caterpillar Inc. and McDonald's Corp.

UPS's worldwide operations make it a strong indicator for the broader economy since it handles shipping for everyone from individuals to large companies. Caterpillar's equipment sales signal whether construction and manufacturing is picking up across the globe.

Outside of the earnings data, the Labor Department also releases its weekly report on first-time claims for unemployment benefits Thursday. Claims have hovered near 450,000 for much of the year, indicating that companies are not laying off many workers but not hiring many either. High unemployment remains a major obstacle to strong economic growth, so any signs of falling claims usually lift the market.

Investors appeared to brush aside reports that growth in China slowed, which could eventually affect exports and sales to the country. The Chinese government said growth slowed to a still robust 9.6 percent in the third quarter. China has been trying to slow growth to a more sustainable level that keeps inflation from getting out of control.

Ahead of the opening bell, Dow Jones industrial average futures rose 41, or 0.4 percent, to 11,104. Standard & Poor's 500 index futures rose 5.40, or 0.5 percent, to 1,180.10, while Nasdaq 100 index futures rose 13.25, or 0.6 percent, to 2,097.00.

Netflix shares rose $16.96, or 11.1 percent, to $170.11 in pre-opening trading, while eBay shares rose $1.77, or 6.9 percent, to $27.43.

The Dow is trying to climb Thursday after surging 130 points a day ago. Strong earnings from airlines and manufacturers, along with a drop in the dollar, helped send stocks higher. After a strong September, stocks are again proving to be resilient. The Dow is up 3 percent so far this month.

Meanwhile, bond prices traded in a tight range Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was unchanged at 2.48 percent compared with late Wednesday.

[Associated Press; By STEPHEN BERNARD]

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