Wall Street 'Faces' a higher start

NEW YORK (CNNMoney.com) -- U.S. stocks futures were slightly higher early Thursday as continued concerns about the economy and a continued run-up in oil prices were balanced by details of a much-anticipated deal between Microsoft and Facebook.

Futures for the blue chip S&P were narrowly higher in early trading, while futures for the tech-heavy Nasdaq were showing a solid gain, helped by a 1.7 percent gain in shares of Microsoft (Charts, Fortune 500) in early Frankfurt trading.

On Wednesday, Microsoft announced it was making a $240 million investment in social networking site Facebook and also said it was expanding its ad deal with the site.

Microsoft, a Dow component, is also due to report results after the close Thursday, with investors looking for an 11 percent gain in earnings.

Art Hogan, chief market analyst at Jefferies & Co., said that while the deal is minor in dollar terms for a company the size of Microsoft, it's seen as an important strategic move for the software giant.

"It's got that buzz to it," he said. "It shows that Microsoft is reinvigorating itself, getting something with some sex appeal."

Other major companies that announced results Thursday included No. 1 cable operator Comcast (Charts), which reported earnings that met forecasts, cell phone maker Motorola (Charts, Fortune 500), which reported a plunge in earnings that was a penny a share worse than forecast, and Dow Chemical (Charts, Fortune 500), the nation's No. 1 chemical company, which reported a bigger than forecast drop in earnings excluding special items.

Economic and oil price woes also could get investor attention Thursday.

Oil prices, which surged nearly $2 a barrel Wednesday on a surprise drop in U.S. inventories, gained another $1.25 to $88.35 in early electronic trading Thursday.

At 8:30 a.m. ET the government is set to report on durable goods orders. Economists surveyed by Briefing.com are forecasting that demand for big ticket items gained 1.5 percent in September after a 4.9 percent drop in August. The weekly report on initial jobless claims is also due at 8:30; it jumped a week ago to their highest level since February.

Still Hogan said bad economic news could actually be good news for the markets Thursday, as it would raise hopes for the Federal Reserve to announce another rate cut, perhaps as big as a half a percentage point once again, when it concludes a two-day meeting Wednesday.

Hogan said the durable goods report, particularly the report on non-defense, non-aircraft capital expenditures, which is taken as a proxy of business spending, will get a lot of attention from the markets as a sign of what the Fed will do next week.

"Right now the Fed funds future sees a 25 percent chance of no rate cut and a 50 percent chance of a [half-point] cut," he said. "So anything that solidifies the belief of a Fed cut will be taken as a positive by the market, even if that means we're hoping for bad news."

Investment guru Warren Buffett, in comments during a trip to South Korea, warned Thursday that subprime mortgage woes will likely weigh on consumers for up to two years.

At 10 a.m. ET comes a government report on new home sales. The National Association of Realtors reported Wednesday that existing home sales posted their worst drop since the trade group started tracking that key measure in 1999.

Economists are looking for new home sales, a more forward-looking reading due to the way the data are collected, to fall to an annual pace of 775,000, down 2.5 percent from August. That would be an 11-year low if that comes to pass.

Still Hogan said he doubts the new home sales number will be the key economic reading Thursday.

"Unless you've lived in a cave, you know that home sales have been a disaster," he said. "And even if new home sales tick up, no one is going to be ready to call a bottom on this."

After the closing bell Wednesday Pulte Homes (Charts, Fortune 500), the nation's No. 4 builder by revenue, reported a much bigger than expected loss in the most recent quarter.

Members of the United Auto Workers union gave a boost to the tentative labor deal at Chrysler LLC Wednesday, when rank and file at four key locals voted in favor of ratification. The cost-cutting deal had been seen to be at risk of defeat before the vote. If member pass the deal in voting that concludes Friday, it would clear the way for the union to move on to reach a deal at Ford Motor, the last of the Big Three to reach a cost-cutting deal.

There was more sign of troubles among financial firms hit by the meltdown in credit markets. Bank of America (Charts, Fortune 500) announced Wednesday that it will restructure its investment banking unit, changing the head of the unit and cutting 3,000 jobs. Shares of the nation's No. 2 bank lost 0.4 percent in after-hours trading despite the cost-cutting move.

In Asia, Hong Kong stocks finished the session higher, but China's benchmark index sank nearly 5 percent on worries that economic growth in China had peaked. Shares on Japan's Nikkei slipped 0.5 percent. After the close of trading there, Honda reported profit jumped 63 percent in the most recent quarter.

Stocks were generally higher in Europe in early trading as the rising hopes of a Federal Reserve rate cut that lifted U.S. stocks in late trading were also cheering European investors.