A rally in the works

NEW YORK (CNNMoney.com) -- A rally could be in the works for U.S. stocks Thursday as a follow through for gains overseas.

At 7:35 a.m. ET, Nasdaq and S&P futures were sharply higher, despite generally weak February sales reports from the nation's major retail chains.

Stocks closed sharply higher in Asia, as Japan's Nikkei added nearly 2 percent and Hong Kong's Hang Seng gained 1.4 percent.

The Shanghai Composite, which has gotten particular attention since a sharp drop there on Feb. 27 sparked a global selloff, gained just over 1 percent.

Major indexes also were higher in Europe in early trading, while the dollar was higher against the euro and the yen.

John Silvia, chief economist at Wachovia, said he also believes that U.S. stocks will be helped be a lessening of concern over the state of the U.S. economy, which he believes had gotten too bearish in recent days.

"At the traders meeting Tuesday, they had gotten very pessimistic about credit quality and the overall economy," he said. Expectations are growing that the government's February jobs report, due before the market open Friday, won't be a disaster, he added.

"I think they're getting less pessimistic about the jobs report and the overall state of the economy," he said.

Oil was somewhat lower, with U.S. light crude down 9 cents to $61.73 a barrel in electronic trading.

Treasury prices fell, raising the 10-year note yield to 4.51 percent from 4.48 percent late Wednesday.

Throughout the morning major retailers were reporting February sales at stores open at least a year, a closely watched retail measure known as same-store sales.

Early results were generally a touch weaker than expected, led by disappointing figures at No. 1 retailer Wal-Mart Stores (Charts). Its same-store sales were up only 0.9 percent, less than the forecast of a modest 1.5 percent gain.

Costco (Charts), the wholesale club retailer, saw same-store sales gain 4 percent, a bit below the Thomson First Call forecast of a 5.1 percent sales gain. But it also reported fiscal second-quarter earnings that met forecasts, excluding special items.

With about half the companies, mostly smaller retailers, reporting results, Thomson estimates that those missing forecasts outnumbered those beating forecasts by nearly two-to-one.

Overall, Thomson had been looking for a modest 3 percent rise in same-store sales, with stores other than Wal-Mart expected to increase those sales by 4.1 percent. Silvia said he believes investors will generally write off poor results to bad weather in in the month.

"That shouldn't spook the market," he said.

In corporate news, in an interview with the Wall Street Journal,General Motors (Charts) CEO Rick Wagoner said he does not expect consolidation within the U.S. auto industry in the near term, although he declined to comment on reports that GM is exploring a purchase of rival Chrysler Group from DaimlerChyrsler (Charts).

Wagoner also said U.S. auto plant capacity is likely to exceed demand for at least the next 10 years. Shares of both GM and DaimlerChrysler slipped in early Frankfurt trading.

Express Scripts (Charts) hiked its hostile bid for Caremark (Charts), which has agreed to be purchased by drugstore chain CVS (Charts) for $22.9 billion.

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