Stocks ready to charge forward

NEW YORK (CNNMoney.com) -- U.S. stocks were set to charge higher Thursday as economic optimism overshadowed worries that a Chrysler bankruptcy may be near.

At 8:35 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq-100 futures were pointing higher.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

Wall Street advanced Wednesday after the Federal Reserve issued a slightly more upbeat economic outlook. Signs that consumer spending rebounded in the first quarter even as the economy contracted also boosted optimism.

"The markets are up because the Fed essentially upgraded the economy yesterday, and economic data have pointed to things being better than expected," said Art Hogan, chief market strategist at Jefferies & Co.

Economy: The Labor Department's weekly report on jobless claims showed initial applications for unemployment benefits unexpectedly dropped, falling by more than 16,000 to 631,000 claims last week. Continuing claims topped 6.27 million - a new record.

The government reported that both personal income and spending fell a bit more than expected in March. Income dropped 0.3% and spending fell 0.2%. Analysts surveyed by Briefing.com expected spending to have fallen back 0.1% in March after a 0.2% rise in February. Income was forecasted to slip another 0.2%.

The government's Employment Cost Index for the first quarter showed a 0.3% rise, lower than the 0.5% rise analysts expected.

A regional manufacturing survey, the Chicago PMI, is due to be released at 9:45 a.m. ET.

Chrysler: Reports suggest that automaker Chrysler may file for bankruptcy protection Thursday after talks between creditors and the Treasury Department collapsed.

However, it's possible that even with the setback, the company will avoid going down the path to closure and liquidation. Bankruptcy is expected to be swift and would likely pave the way for a merger with Italian carmaker Fiat.

Stocks appeared undeterred by the news, as the move to bankruptcy has been widely expected for some time.

"Both Chrysler and GM have effectively been priced in by the markets, because it's something that's been brewing for some time," said Hogan "The market has done good job at being forward looking."

Companies: Exxon Mobil (XOM, Fortune 500) reported net income slipped by 54% in the quarter as oil prices and demand dropped precipitously. The results missed analysts' expectations.

Exxon was just one of more than 100 companies that are set to report first-quarter earnings before the opening bell Thursday.

Other notables included Dow Chemical (DOW, Fortune 500), whose quarterly profit fell 97% and sales fell 39% on weak demand for its products and falling energy prices, and Procter & Gamble (PG, Fortune 500), whose net income slipped 4% last quarter, just missing Wall Street's estimates.

Coffee retailer Starbucks (SBUX, Fortune 500) reported a 77% drop in quarterly net income after U.S. markets closed Wednesday. The results topped Wall Street's estimates.

Bank of America (BAC, Fortune 500) shareholders voted late Wednesday to remove Ken Lewis as chairman. Lewis, however, will keep his position as chief executive.

World markets: Stocks around the world rallied. In Asia, Japan's Nikkei advanced nearly 4%. Major markets in Europe were all up more than 1% in morning trading.

Other markets: Oil prices edged 64 cents higher Thursday to $51.61 a barrel after settling more than a $1 higher Wednesday. Oil prices have been teetering above and below the $50 mark since mid-March.

The dollar was unchanged against the euro, modestly lower against the British pound and slightly higher against the Japanese yen.