May 4, 2007 / 9:59 AM / 12 years ago

U.S. stock futures rise as Microsoft may eye Yahoo

LONDON, May 4 (Reuters) - U.S. stock futures rose on Friday after reports that Microsoft Corp. (MSFT.O) had intensified its pursuit of a deal to take over search engine Yahoo Inc. YHOO.O and investors geared up for the April U.S. employment report.

The New York Post said on its website Microsoft, the world’s largest software company, had asked Yahoo to re-enter formal talks. The two have held informal deal talks over the years, but the latest approach signalled a new urgency on Microsoft’s part, the Post said.

“There’s rumours doing the rounds that Microsoft might be looking at Yahoo ... that’s going to be the main focus today,” said one trader.

Yahoo shares were trading up over 13 percent at 23.60 in European trading hours, while Microsoft shares shed 0.3 percent.

June Dow Jones futures DJM7 were up 0.2 percent, while S&P futures SPM7 were up 0.1 percent and Nasdaq 100 futures NDM7 gained 0.2 percent.

The April non-farm payrolls report is due at 1230 GMT and analysts expect to see a rise of 100,000, compared with the 180,000 rise in March.

Thursday's data on the U.S. services sector, first-quarter productivity and weekly jobless claims came in strong enough to push the Standard & Poor's 500 .SPX above 1,500 for the first time since September 2000.

The Dow Jones industrial average .DJI closed at a record high for the third day in a row on Thursday, driven by gains in Verizon Communications Inc. (VZ.N) on news the telecoms company would take video and Internet customers from rival Cablevision Systems CVC.N.

The Dow ended up 29.50 points, or 0.2 percent, at 13,241.38 points, while the S&P gained 6.47 points, or 0.4 percent, at 1,502.39. The Nasdaq Composite Index .IXIC was up 7.62 points, or 0.3 percent, at 2,565.46.

Blue chip shares might get a boost from Starbucks Corp. (SBUX.O), which rallied after the bell on Thursday after the coffee shop chain reported quarterly results that met expectations.

Nabor Industries Inc. (NBR.N), the world’s largest land-based oil and gas driller, also rose in late trade after reporting earnings that beat analysts’ expectations.

Corporate earnings due later in the session included releases from Eastman Kodak Co. EK.N, forest products company Weyerhaeuser Co. (WY.N), power company Public Service Enterprise Group Inc. (PEG.N), Texas power and gas utility Centerpoint Energy Inc. (CNP.N) and Apartment Investment and Management Co. (AIV.N), one of the largest U.S. apartment landlords.

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