July 16, 2009 / 12:23 PM / 10 years ago

US STOCKS-Futures slip ahead of key weekly jobs data

* JPMorgan results beats estimates

* Investors fret about CIT’s survival

* US Treasury Sec Geithner says markets functioning better

* For up-to-the-minute market news click [STXNEWS/US] (Adds Geithner comments, updates prices)

By Rodrigo Campos

NEW YORK, July 16 (Reuters) - U.S. stock index futures slipped on Thursday as a jump in quarterly profit at JPMorgan Chase & Co(JPM.N) was overshadowed by investor angst about the future of lender CIT Group Inc and caution ahead of a key report on the labor market.

JPMorgan’s second quarter results topped Wall Street’s estimates, continuing a stream of reassuring news on bank earnings after Goldman Sachs Group (GS.N) posted similarly stronger results on Tuesday. For details see [ID:nN16338928]

A day after Wall Street tallied its biggest three-day gain since March, the financial sector also found support in comments from U.S. Treasury Secretary Timothy Geithner, who told reporters in Paris there is a “very encouraging improvement in confidence in the overall stability of the financial system.” [ID:nLG130855]

After meeting with French Economy Minister Christine Lagarde, Geithner also said markets were functioning better, which he said as a good sign for the economy.

But the upbeat tone was confronted by a possible bankruptcy looming for small-business lender CIT (CIT.N).

Talks between the government and CIT about a potential bailout collapsed on Wednesday, a reminder that fallout from the financial crisis and the recession is far from over.

In Paris, Geithner declined to comment directly on CIT.

“The market is going to continue to look for fuel from earnings,” said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey. “The concern is that CIT does not appear to be getting a government bailout.”

S&P 500 futures SPc1 were 1.7 points lower and 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 DJc1 rose 1 point, and Nasdaq 100 NDc1 futures shed 2 points.

Investors will be closely monitoring the weekly number of initial filings for jobless benefits, expected to come in unchanged from the previous week’s 565,000. Continuing claims are expected to inch lower to 6.850 million from 6.883 million the week before. This key data is due at 8:30 a.m. (1230 GMT).

Other data on tap for Thursday includes the Philadelphia Federal Reserve Bank’s release of its July business activity survey at 10 a.m. (1400 GMT). Economists in a Reuters survey forecast a reading of -5.0 versus -2.2 in June.

Former Treasury Secretary Henry Paulson is scheduled to testify before a U.S. House of Representatives panel about the takeover of Merrill lynch by Bank of America at 10 a.m. (1400 GMT).

On the earnings front, Google Inc (GOOG.O) and IBM Corp (IBM.N) are set to report results after the bell. (Editing by Padraic Cassidy)

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