US STOCKS-Futures gain ahead of vote to cut deficit
* Republican debt plan faces close vote in U.S. Congress
* US jobless claims, pending home sales data on tap
* Futures up: S&P 3.3 pts, Dow 11 pts, Nasdaq 5.75 pts
* For up-to-the-minute market news see [STXNEWS/US] (Adds quote, byline)
By Angela Moon
NEW YORK, July 28 (Reuters) - U.S. stock index futures rose on Thursday after Wall Street suffered its worst day in eight weeks, but the session was predicted to be volatile ahead of a key vote later in the day on a bill to cut the U.S. deficit.
The S&P 500 .SPX index fell 2 percent on Wednesday, losing nearly 3 percent for the week, hit by weak earnings, lackluster economic data and as U.S. politicians struggle to agree over the nation's debt ceiling days before the deadline to avoid default.
A bill to cut the U.S. deficit faced a nail-bitingly close vote in Congress on Thursday as the top Republican lawmaker sought to quell an internal revolt and push his plan to avoid a ruinous default. For details, see [ID:nN1E76R004]
Approval of a plan by U.S. House of Representatives Speaker John Boehner would break the inertia in Washington over a U.S. debt crisis that has spooked markets and raised the prospect that the government of the world's largest economy will run out of money to pay its bills in less than a week. Concerns of a possible downgrade of the U.S. credit rating have been weighing on global equities.
"While I think the odds are close to zero that the debt ceiling doesn't get raised with a spending cut plan of some sort, I can't say with any confidence, how the markets will respond to a downgrade of the U.S. credit rating -- the credit rating of the largest economy in the world with its currency as the world's biggest medium of exchange and its level of interest rates being considered the risk-free rate," said Peter Boockvar, equity strategist at Miller Tabak in New York.
Investors were also closely watching jobless claims data due at 8:30 a.m. (1230 GMT). If the number for the week ending July 23 is near Wall Street's forecast of 415,000, it will mark the 16th consecutive week that initial jobless claims hover above 400,000.
U.S. pending home sales probably fell about 2 percent in June after two months of unusual volatility, which included an 11.3 percent drop in April followed by an 8.2 percent rebound in May. The data is due at 10:00 a.m.
S&P 500 futures SPc1 rose 3.3 points and were slightly above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 were up 11 points, and Nasdaq 100 futures NDc1 gained 5.75 points.
Exxon Mobil Corp (XOM.N), the world's largest publicly traded oil company, is among several companies to report results. High crude oil prices are expected to have boosted second-quarter profits, but investors have been pressing the company to deliver more cash to shareholders through a higher dividend.
Others due to report include Starbucks Corp (SBUX.O).
Financial stocks were in focus as major European banks announced jobs cuts. Swiss bank Credit Suisse (CSGN.VX) is cutting about 2,000 jobs after a second quarter hit by weak trading activity and the strong Swiss franc. [ID:nLDE76R02I]
HSBC (HSBA.L) may cut more than 10,000 jobs as it embarks on a cost-cutting drive, Sky News reported, citing people close to Europe's biggest bank. [ID:nL3E7IS0KG]
Ford Motor Co (F.N) plans to build a $900 million production plant in India, doubling its investment in the country, as the No. 2 U.S. carmaker seeks to catch up with rivals in the second-fastest growing auto market in the world. [ID:nL3E7IS0FS] (Editing by Padraic Cassidy)
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