* Data expected to show improved jobs growth
* S&P may be vulnerable after strong January gains
* Merck beat expectations, but full-year view tepid
* Futures up: Dow 63 pts, S&P 4 pts, Nasdaq 6.5 pts
By Ryan Vlastelica
NEW YORK, Feb 1 U.S. stock index futures gained
on Friday as investors anticipated data that was expected to
show that U.S. jobs growth picked up in January.
The non-farm payrolls report is expected to indicate that
160,000 jobs were added in January, from 155,000 a month
earlier, in a sign of continued labor market recovery despite an
unexpected contraction in fourth-quarter gross domestic product.
The report is due at 8:30 a.m. EST (1330 GMT)
If the jobs figure is weaker than expected, the market could
be vulnerable to a pullback, tipping the S&P 500 off its best
monthly performance since October 2011. However, any losses
could be limited as investors have been buying on dips over the
past four weeks. The largest daily decline in the S&P 500 so far
this year was Wednesday's 0.39 percent drop, after the GDP data.
"A disappointing report could mark the start to a minor
correction as the market is more likely to consolidate at these
levels, but the flows coming into equities would make any
pullback shallow," said Paul Mendelsohn, chief investment
strategist at Windham Financial Services in Charlotte, Vermont.
"Still, there is further room to rise, and if the report is
strong, we could break through (resistance at) 1,510 on the S&P,
which could allow us to work our way towards 1,530."
While Thursday's jobless claims report was weaker than
forecast, many recent indicators, including the ADP employment
report and personal income data, have pointed to stronger
Dow component Merck & Co dipped 0.6 percent to $43
in light premarket trading after the company gave a cautious
outlook on 2013, though its quarterly results beat expectations.
S&P 500 futures rose 4 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures added 63
points, and Nasdaq 100 futures rose 6.5 points.
The S&P advanced 5.1 percent in January, with gains driven
by a sturdy start to the earnings season and a compromise in
Washington that postponed the impact of a "fiscal cliff" of
automatic spending cuts and tax hikes that were due to take
effect early this year.
So far this week, the Dow is down 0.3 percent, the S&P is
off 0.3 percent, and the Nasdaq has dipped 0.2 percent.
While the payroll report will likely be the primary market
driver, corporate earnings will stay in focus. Exxon Mobil Corp
and Chevron Corp, both Dow components, are on
tap to report on Friday.
"Earnings have been one of the strongest sectors during the
recent rally, so Exxon and Chevron results will be especially
important to gauge where the group is going from here,"
Of the 231 companies in the S&P 500 reporting earnings so
far, 69.3 percent have exceeded expectations, according to
Thomson Reuters data through Thursday morning. That is a higher
proportion than over the past four quarters and above average
Overall, S&P 500 fourth-quarter earnings rose 3.7 percent,
according to the data, above a 1.9 percent forecast at the start
of the earnings season but well below a 9.9 percent profit
growth forecast on Oct. 1.
Other data due Friday include consumer sentiment, U.S.
manufacturing, construction spending and car sales. January
sentiment is seen edging slightly higher in the month while
construction spending rises 0.6 percent in December.
U.S. stocks closed lower on Thursday amid investor caution
ahead of the payroll report.