NEW YORK: US stocks were set to open little changed on Thursday, after economic data gave some respite to investors worried that the lack of a deal on how to handle the Greek debt crisis could trigger disorderly market moves and crimp liquidity.
Still, developments in Europe could define the market's direction.
New applications for US unemployment benefits dipped in the latest week, while housing starts rose more than expected and permits for future construction were the highest since December. For details, see
The data was "better than expected, and brought S&P futures up," said Rich Ilczyszyn, market strategist with Lind Waldock in Chicago. "But this is a minor blip compared to the Greece debacle."
A string of parliamentary resignations threw Greek Prime Minister George Papandreou's plan to reshuffle his cabinet and seek support for a crucial austerity package into disarray. The government risks bankruptcy if it fails to pass a highly unpopular five-year plan.
"Once we get through the better data here, we're going to have to focus on Greece again, which isn't good," Ilczyszyn said. "The data doesn't even matter right now, though if Greece hadn't returned to the forefront this would be positive at these technical levels."
The S&P 500 closed Wednesday at 1,265.42 and has fallen 7.7 percent from its high in May 2. The benchmark has technical support at 1,256.81, its 200-day moving average, and at the 2011 low near 1,250.
S&P 500 futures edged up 2.3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures fell 1 point and Nasdaq 100 futures rose 3.5 points.
World stocks hit a three-month low, copper prices and the euro tumbled while top-rated government bonds rose as investors began to price in a possible disorderly default in Greek debt.
The Philadelphia Federal Reserve Bank's business activity survey was due at 10 a.m. EDT (1400 GMT), with economists expecting a reading of 6.8 versus 3.9 in May.
The CBOE Volatility Index jumped 16.8 percent to 21.32 on Wednesday, its highest since March 18.
Copyright Reuters, 2011
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