"The market is optimistic that a deal to increase the debt ceiling temporarily can be reached before October 17th," said Kit Juckes of Societe Generale. "U.S. political protagonists are talking again and [incoming Federal Reserve chairwoman Janet] Yellen's nomination has been well received."
House Republican members and party leadership sources told CNN that leaders are working on a proposal to raise the debt ceiling temporarily, while the government would remain partially shut down.
That would buy time for negotiations on the budget impasse.
While most economic reports are on hold because of the shutdown, the U.S. Labor Department will release its weekly report on initial jobless claims at 8:30 a.m. ET.
What's moving: Shares of Citrix Systems(CTXS) sank in premarket trading after the software company released its third-quarter results early, saying it expected earnings and revenue to come in lower than previously anticipated.
Netflix(NFLX), eBay(EBAY) and Halliburton(HAL) were among the biggest gainers early Thursday.
U.S. stocks finished higher Wednesday as investors cheered President Obama's nomination of Yellen to be the next head of the Fed.
European markets were broadly higher in morning trading, with France's CAC 40 leading the pack with a 1.5% jump, while Asian markets ended mixed. The main indexes in Shanghai and Hong Kong fell by 0.9% and 0.5% respectively. In Japan, the Nikkei added 1.1% as the yen weakened against the dollar.