US STOCKS-Optimism over Washington negotiations lifts futures

Thu Oct 10, 2013 8:08am EDT

* Chevron warns on Q3 earnings

* Initial jobless claims data on tap

* JPMorgan to sell physical commodities business

* Indexes up: Dow 119 pts, S&P 15.2 pts, Nasdaq 28.75 pts

By Chuck Mikolajczak

NEW YORK, Oct 10 (Reuters) - U.S. stock index futures rose on Thursday as investors were encouraged by signs of a thaw in the fiscal negotiations in Washington.

According to a Republican leadership aide, U.S. House of Representatives Republicans are considering agreeing to a short-term increase in the government's borrowing authority, keeping a possible default after Oct. 17 at bay and buying time for negotiations on broader policy measures.

"This is pretty predictable inside the market, the stock market has become a slave to Washington policy theatrics - Washington policy nonsense trumps all (trading) models," said Keith Bliss, senior vice-president at Cuttone & Co in New York.

"When there is a crisis in that town between politicians, especially now that our fiscal woes are so apparent to the rest of the world, you just have to follow the words coming out of there."

The U.S. government shutdown has been in effect for ten days since congressional Republicans refused to pass a budget for the fiscal year without modifications to President Barack Obama's healthcare reform law.

Investors await weekly initial jobless claims data, one of the few government data points to be released during the shutdown. Economists in a Reuters survey forecast a total of 310,000 new filings compared with 308,000 in the prior week.

The Dow and S&P 500 rose on Wednesday on early signs of a possible break in the impasse between Republicans and Democrats in Congress, but the Nasdaq closed lower for a third day as investors continued to sell this year's high-flying tech stocks such as Facebook Inc and Amazon.com Inc.

The Nasdaq technology sector has shed 2.8 percent over the last three sessions, its biggest three-day drop since late June.

S&P 500 futures rose 15.2 points and were 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 gained 119 points and Nasdaq 100 futures added 28.75 points.

Chevron Corp, the second-largest U.S. oil company, warned on Wednesday its third-quarter earnings would be lower than in the second quarter as fuel margins were squeezed.

S&P 500 companies due to report earnings after the close include Micron Technology Inc and Safeway Inc.

JPMorgan Chase & Co has launched the sale of its physical commodities business, circulating offering documents to potential buyers and valuing the assets at $3.3 billion, according to a person familiar with the matter.

Gilead Sciences Inc rose 4.1 percent to $61.29 in light premarket trade after a pivotal trial of its drug idelalisib was stopped early after independent monitors determined the drug was effective against Leukemia.

Citrix Systems Inc slumped 12.2 percent to $58.50 before the opening bell after the cloud computing software maker estimated quarterly results to be below analysts' expectations as businesses delayed contracts.

European shares rose and Japanese stocks moved to a one-week high on signs of progress to end the fiscal stalemate in Washington.

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