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US STOCKS-S&P 500, Dow set to open higher shrugging off bleak GDP, jobless claims data

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Devik Jain and Shreyashi Sanyal
·3 min read
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(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

* Weekly jobless claims dip, but still remain high

* U.S. economy contracts in 2020; worst performance since 1946

* Tesla slips after disappointing results

* Futures: Dow up 0.57%, S&P up 0.37%, Nasdaq down 0.17% (Adds comments, background, update prices throughout)

By Devik Jain and Shreyashi Sanyal

Jan 28 (Reuters) - The S&P 500 and the Dow Jones indexes were set to open higher on Thursday, shrugging off data which showed another sharp contraction in the U.S. economy and a rise in weekly jobless claims.

The U.S. economy contracted at its sharpest pace since World War Two in 2020 as COVID-19 ravaged services businesses such as restaurants and airlines.

A separate report showed 847,000 more people likely filed jobless claims last week, strengthening views of a persistent labor market weakness.

"This is a market which thinks about what the economy might look like six months from now ... and I think this is a time when the near-term numbers are of very little consequence to most investors," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

With the quarterly earnings season in full swing, earnings from mega-cap technology-related firms were mixed as investors also started to question whether companies including Apple Inc , Facebook Inc and Tesla Inc could justify their premium valuations.

"Investors are digesting earnings that came out overnight and this morning, and taking a look at the fundamentals of what's going on in specific companies, as well as any outlook that can be provided to try to justify valuations," said Brian Vendig, managing executive at MJP Wealth Advisors in Westport, Connecticut.

Vendig added that investors could be rethinking positions over the next couple of weeks as more companies come out with their earnings reports.

Apple reported holiday-quarter sales and profit that beat Wall Street expectations, however, shares of the iPhone maker fell 1.8% premarket.

Facebook dipped 0.9% as it warned Apple's impending privacy changes could hurt revenue by interfering with ad targeting, even after soundly beating quarterly revenue estimates.

Tesla lost 4.9% after the electric-car maker reported disappointing fourth-quarter results and failed to provide a clear target for 2021 vehicle deliveries.

Concerns about slowing momentum in economic recovery due to rising coronavirus cases, heightened stock market valuations, and uneven distribution of vaccine rollouts have kept investors on edge about a pullback and increase in volatility in the near-term.

At 8:54 a.m. ET, Dow e-minis were up 171 points, or 0.57%, S&P 500 e-minis were up 14 points, or 0.37%, and Nasdaq 100 e-minis were down 22 points, or 0.17%.

Comcast Corp added 4.2% after it reported better than expected fourth-quarter revenue, as broadband demand continued to offset pandemic-related weakness in its theme park and filmed entertainment businesses.

Payments processor Mastercard Inc gained 3.2% after it beat Wall Street estimates for fourth-quarter profit. (Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)