NEW YORK (CNNMoney.com) - The new year rally could come to a halt Thursday as rising oil prices dampen investor sentiment towards the stock market.

U.S. stock futures were down but off of earlier lows, indicating a lower opening for the major indexes, after economic reports came in better than expected.

The trade deficit narrowed more than expected in November to $64.2 billion. Economists were expecting a trade deficit of $66 billion, according to Briefing.com.

And the number of workers making new claims for unemployment benefits rose less-than-expected to 17,000 last week. Initial jobless claims were expected to tick up to 320,000 from 291,000.

Stocks have been on a tear since the beginning of a new year, closing Wednesday at 4-1/2 year highs. But market watchers say a pullback is to be expected.

"Between higher energy prices, a rising yield, cautious statements about earnings and geopolitical problems, I'm looking for a catalyst that justifies higher ground for the market," said Marc Pado, U.S. market strategist at Cantor Fitzgerald. "I'm not looking for a bearish turn but certainly a correction is in the cards once the January effect is behind us."

Oil prices climbed in early trading. The February light crude futures contract for NYMEX gained 60 cents to $64.54 a barrel in electronic trading, while the February contract for Brent crude rose 83 cents to $63.

Treasury prices edged higher, with the yield on the 10-year note falling to 4.44 percent from 4.45 percent late Wednesday. Bond prices and yields move in opposite directions.

The dollar was virtually unchanged against the euro but lost some ground against the yen

Asian markets ended mostly higher with Tokyo's Nikkei index hitting a new five-year high following a rally in technology stocks. European markets were trading lower.

In corporate news, Guidant accepted a revised takeover offer of $23.2 billion from Johnson & Johnson instead of an unsolicited $25 billion bid from Boston Scientific. Boston Scientific, however, isn't backing down, saying that the company will continue to pursue the acquisition.

Starbucks (Research) is going Hollywood. The company is expected to announce a promotional deal for Lions Gate Entertainment's upcoming film "Akeelah and the Bee," in which the company will aggressively promote the film in its U.S. and Canadian stores, and will sell DVDs of the movie and CDs of its soundtrack in the U.S., the Wall Street Journal reported.

And Lockheed Martin (Research) may lose out on an $8 billion contract with the U.S. Army. The Journal reports that the Army is poised to cancel a Lockheed Martin spy-plane program due to competing budget priorities and problems in the aircraft's development.

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