By Ryan Vlastelica
NEW YORK (Reuters) - Stock index futures pointed to a flat open on Thursday as disappointing data on the labor market offset strong results from CATERPILLAR (CAT.NY)
Initial jobless claims surged in the latest week to the highest level since late October, the government said.
"The market was looking for an improving trend but we didn't get it," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "We're in a recovery, but it isn't smooth or without its setbacks."
Three Dow components posted quarterly results, including Procter & Gamble Co
AT&T and P&G shares fell as their profits slid from the year-ago period, and AT&T's wireless subscriber growth was below consensus. AT&T dropped 3 percent to $27.87 before the bell, while P&G lost 2.5 percent to $64.45.
"Caterpillar's results were encouraging and suggest that 2011 will continue to be strong," Tuz said. "It points to an economic recovery here and continued growth elsewhere."
S&P 500 futures dipped 1.9 points 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 lost 2 points, and Nasdaq 100 futures slid 1 point.
Overseas, ratings agency Standard & Poor's cut Japan's long-term debt rating by one notch to AA minus, saying the government lacked a coherent plan to tackle its mounting debt.
A pair of Nasdaq stalwarts will report results after the bell. Microsoft Corp
In other economic news, new orders for U.S. manufactured goods fell unexpectedly in December, according to a Commerce Department report.
On Wednesday, gains in technology and commodity shares helped lift markets as investors largely ignored the U.S. Federal Reserve's lukewarm assessment of the economy. The Dow hit the 12,000 level for the first time since June 2008, though it later fell below that level.
(Editing by Jeffrey Benkoe)
