* Citigroup falls in premarket, Fed rejects capital plan
* GDP grew 2.6 pct in Q4; jobless claims unexpectedly drop
* BofA to pay $9.3 bln to settle mortgage bond claims
* Futures up: Dow 18 pts, S&P 0.8 pt, Nasdaq 0.5 pt
(Updates with GDP and jobless claims data)
By Ryan Vlastelica
NEW YORK, March 27 U.S. stock index futures
indicated a flat opening on Wall Street Thursday as the latest
economic data pointed to improving conditions, though investors
were reluctant to make big bets amid tensions in Ukraine and a
drop in Citigroup shares.
* Gross domestic product expanded at a 2.6 percent annual
rate in the fourth quarter, the Commerce Department said, up
from the 2.4 percent pace it estimated last month but slightly
under the 2.7 percent expectation of analysts. In a positive
sign for the labor market, jobless claims unexpectedly fell in
the latest week, dropping a near four-month low.
* The data provided encouraging signs on the economy,
supporting a theory that weakness seen earlier this year was
related to bad weather rather than worsening fundamentals.
* Equities have been volatile this week, driven by
fluctuating tensions in the biggest conflict between Russia and
the United States since the Cold War. While data has supported
the market, investors used the uncertainty over Ukraine as an
opportunity to take profits in some of the market's biggest
outperformers, especially in the technology and biotech sectors.
* Citigroup Inc slumped 5.9 percent to $47.18 in
premarket trading a day after the Federal Reserve rejected the
bank's plan to buy back $6.4 billion of shares and boost
dividends, saying the bank wasn't sufficiently prepared to
handle a potential financial crisis. A source close to the
matter told Reuters that Citi officials had not expected the
* Four other banks also had their plans rejected, including
Zions Bancorp and the U.S. units of HSBC
, RBS and Santander.
* The financial Select Sector SPDR ETF was little
changed on the day, with the weakness from Citigroup countered
by a 0.8 percent premarket rise in Bank of America. The
stock rose after it agreed to pay $9.3 billion to settle claims
that it sold Fannie Mae and Freddie Mac
faulty mortgage bonds, helping the bank to end one of the
largest legal headaches it still faced from the financial
* S&P 500 futures rose 0.8 point but were below 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 added 18
points and Nasdaq 100 futures rose 0.5 point.
* Geopolitical issues remained in view a day after the U.S.
and the European Union agreed to work together to prepare
possibly tougher economic sanctions in response to Russia's
annexation of Ukraine's Crimea territory, including on the
energy sector. While Western leaders earlier agreed to hold off
on new sanctions unless Moscow takes further destabilizing
actions in the region, investors are concerned about the
potential fallout of a prolonged conflict.
* Ukraine won a $27-billion international financial lifeline
from the International Monetary Fund, rushed through in the wake
of Russia's annexation of Crimea, as Moscow's economy minister
spoke of the cost of military action in its former Soviet
neighbors. The credit is in return for tough economic reforms
that will unlock further aid from the European Union, the United
States and other lenders over two years.
* Pending home sales are due out at 10:00 a.m. EDT (1400
GMT), with sales expected to have held steady in February.
* Yum Brands Inc, which has heavy exposure to China,
said its KFC chain was planning an overhaul of its China menu
and launching a publicity drive as it struggled to emerge from
the shadow of a food-safety scare in 2012.
* Cloud-based payroll processor TriNet Group Inc
said it priced its initial public offering at $16 per share,
valuing the company at about $1.09 billion. The
stock will begin trading on Thursday, a day after King Digital
Entertainment Plc slumped in its trading debut. Shares
of King rose 1.6 percent to $19.30 in premarket trading.
(Editing by Bernadette Baum)