Oil surge weighs on Wall Street

 NEW YORK (CNNMoney.com) -- U.S. stocks appeared set for a tough start on Thursday as investors contemplated the heady gains scored in the past two sessions and eyed a jump in oil prices and much weaker-than-expected earnings from retailer Sears.

At 8:45 a.m. ET, Nasdaq and S&P futures were lower, pointing to a weak open for Wall Street. Trading could be choppy ahead of a speech that Federal Reserve Chairman Ben Bernanke is due to give at 7 p.m. ET in Charlotte on the national and regional economic overview.

Oil prices soared early Thursday after a fire broke out at a pipeline carrying oil from Canada to the U.S. Midwest. The price of a barrel of light sweet crude was up $3.44 to $94.06 in electronic trading.

The climb in oil prices, which tanked on Wednesday, could dash investor enthusiasm, especially after the recent run on Wall Street.

Stocks rallied on Tuesday and Wednesday, sending the Dow higher by 546 points over the two-day run. Overseas stocks followed suit, with Asian markets closing sharply higher. European indexes were mixed in midday trading.

A big driver of the recent stock advance has been rising hopes that the Fed will cut rates when it meets next month. Donald Kohn, the Fed's No. 2 official, raised expectations for more rate cuts when he said the central bank needs to be "nimble." Investors will look to Bernanke's speech tonight for similar signs.

The Commerce Department reported that the nation's economic activity grew at a revised 4.9 percent pace in the third quarter, up from the government's initial estimate of a 3.9 percent growth rate last month. The performance was the strongest in four years, but isn't expected to last through the current quarter amid the continuing housing slump and credit crunch.

The big pickup in GDP didn't change the picture forming in the current October-to-December quarter. And that scenario is somewhat grim, with indications the economy will lose considerable steam.

Growth is expected to slow to a pace of just 1.5 percent or less in the final three months of this year. GDP is the value of all goods and services produced within the United States and is the best measure of the country's economic health.

Another report released Thursday morning on initial jobless claims showed new filings jumped sharply last week, suggesting that the labor market is softening as national economic activity slows.

The number of people seeking unemployment benefits rose by a seasonally adjusted 23,000 to 352,000, according to the Labor Department. It was the highest level since Feb. 10. Economists expected claims to hold steady around 330,000.

The latest reading on the battered housing and home building markets is due at 10 a.m. ET when the Census Bureau reports on new home sales in October. Economists are looking for the annual pace of sales to fall to 750,000 from 770,000 in September.

On Wednesday the National Association of Realtors reported the weakest pace of existing home sales since 1999, when it started tracking that reading. It also saw the biggest year-over-year drop in prices ever recorded, along with a glut of homes on the market reaching a 22-year high.

But the weak housing reading did little to slow U.S. equity markets, and may have spurred on some gains by raising hopes for additional Fed rate cuts. The new home sales report, while measuring a smaller part of the overall real estate market, is seen as a more forward-looking reading since it measures sales at the time a contract is signed, not when a sale is closed.

In major corporate news, E*Trade Financial Corp. (Charts) said it will get a $2.5 billion cash infusion from hedge-fund firm Citadel Investment.

Retailer Sears Holdings (Charts, Fortune 500) could put a brake on the recent run for retailer shares after it reported it was only narrowly profitable in its most recent quarter and badly missed forecasts.

Computer maker Dell (Charts, Fortune 500) reports after the closing bell.

Video recording service TiVo (Charts) reported a smaller-than-expected loss on a better-than-expected sales gain after the bell Wednesday, which sent its shares up 5.7 percent in after-hours trading.

In other corporate news, shares of Comcast (Charts) could take a hit Thursday after a report in the New York Times said Federal Communications Chairman Kevin Martin would push for a vote at the regulator's Dec. 18 meeting on a new rule that would essentially bar the nation's largest cable operator from gaining any more market share.

The move comes after Martin's proposal to put the entire cable industry under tighter FCC control failed to win approval in a meeting that lifted shares of the sector's top players in Wednesday trading.

In addition, Martin told reporters during a conference call Wednesday that he would propose a change in regulations that would allow the proposed buyer of the Tribune Company (Charts, Fortune 500) to retain ownership of both television, radio and newspapers in the Chicago market. A vote on that waiver could come as soon as this week.