NEW YORK (CNN/Money) - U.S. stock futures rallied Thursday morning after two economic reports showed a little more strength than expected.

Early indications point to a higher open.

Stocks rebounded Wednesday after the major indexes reached multi-year lows in the prior session. Part of that rebound may have been attributable to short covering, where traders betting that stock prices that are going lower cash in. Whether or not there's any sustained buying could depend in part on the economic reports issued just before the start of trading. ns.

Initial jobless claims, more closely watched of late because of a swing upward, fell to 406,000 in the week ended Sept. 21 from a revised 430,000 the prior week. Economists expected 420,000 claims in the latest week.

Durable goods orders fell 0.6 percent in August, far narrower than the 3.4 percent drop economists expected. Orders rose a downwardly revised 8.6 percent in July.

After the markets open, the government's August report on new home sales is due. Economists expect a decline to an annual rate of 980,000 from 1,017,000 in July.

For details about Wednesday's trading, click above

Another factor in the markets could be the developing spat between President Bush and leading Democrats. Senate Majority Leader Tom Daschle, D-S.D., blasted Bush on Wednesday, accusing the president of politicizing Iraq and national security to gain leverage in the congressional election campaign. Any feud might slow U.S. military action against Iraq, which has been linked by the administration to al Qaeda, the terrorist group believed responsible for the Sept. 11, 2001 attacks against New York and Washington.

The Dow Jones industrial average gained more than 158 points Wednesday to come off its lowest level in nearly four years. The Nasdaq composite index was 40 points higher in rising above a six-year nadir (see chart).

Asian-Pacific stocks finished higher Thursday, with Tokyo's Nikkei index up 1.7 percent. European markets gained in early trading.

Treasury prices rose in early trading, sending the 10-year note yield down to 3.72 percent from 3.75 percent late Wednesday. The dollar edged higher against the yen, but was weaker versus the euro.

Brent oil futures were steady in London, as market participants weighed concerns about Iraq and the arrival of Tropical Storm Isidore in the Gulf of Mexico oil fields.

General Electric (GE: Research, Estimates) has a conference with analysts slated to start before trading begins. The conglomerate, a Dow component, says its chief financial officer will reiterate his company's third-quarter results forecast. GE shares rose $1.10 to $27 Wednesday.

Shares of Bed Bath & Beyond (BBBY: Research, Estimates) rose 77 cents to $34.45 in before-hours trading Thursday after the home products retailer saw a 40 percent rise in fiscal second-quarter profit.

Among the companies reporting results before trading begins is the grocer Safeway (SWY: Research, Estimates).