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US STOCKS-S&P 500 futures flat as vaccine cheer offsets high jobless claims

Shriya Ramakrishnan and Medha Singh
·3 min read

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* Jobless claims fall after rising for two straight weeks

* Goldman Sachs raises rating on Tesla to "buy"

* 3M ticks higher on 2,900 jobs cut news

* Futures: Dow and S&P flat, Nasdaq up 0.2% (Adds comments, updates prices)

By Shriya Ramakrishnan and Medha Singh

Dec 3 (Reuters) - Futures tracking the S&P 500 and the Dow hovered near record highs on Thursday as hopes of a swift COVID-19 vaccine-driven recovery and economic stimulus eased immediate worries about rising coronavirus cases and high unemployment.

Nasdaq futures rose 0.2% as heavyweight Tesla Inc gained 4.5% premarket after Goldman Sachs upgraded the stock to "buy" from "neutral" in the run-up to the electric-car maker's addition to the S&P 500.

The Labor Department's report showed initial claims for jobless benefits decreased to a seasonally adjusted 712,000 for the week ended Nov. 28. Economists polled by Reuters had forecast 775,000 applications for the latest week.

The U.S. labor market's recovery has been undermined by a surge in COVID-19 infections and fresh business restrictions, which have led to a spike in job losses and added pressure on policy makers for a fresh relief package.

Later in the day, investors will focus on surveys on the services sector, which accounts for more than two-thirds of the U.S. economy. The government's closely watched monthly employment report is expected on Friday.

"Investors are unfazed about riding through the winter virus storm before reaching the end of the tunnel ... markets believe they can always count on more stimulus to smoothen the ride," said Raffi Boyadjian, senior investment analyst at online broker XM.

While Republicans and Democrats in Congress remained unable to smooth out differences over the next coronavirus relief package, there were early signs that a $908 billion bipartisan proposal could be gaining traction as a negotiating tool.

Congress also faces a Dec. 11 deadline to pass a $1.4 trillion budget or risk a shutdown of the government.

Meanwhile, COVID-19 cases have continued to rise. The mayor of Los Angeles warned the city was nearing "a devastating tipping point" and ordered residents to stay in their homes in new lockdown measures.

But progress in developing a working COVID-19 vaccine before the end of the year has helped investors look past the surge in infections, pushing the S&P 500 to a record closing high on Wednesday.

The head of the U.S. Centers for Disease Control and Prevention warned on Wednesday the country will face the grimmest health crisis yet over the next few months, before vaccines become widely available.

At 08:38 a.m. EST, Dow E-minis were up 10 points, or 0.03% and S&P 500 E-minis were down 1.5 points, or 0.04%.

Industrial conglomerate 3M Co's shares gained 0.7% as the company unveiled plans to cut about 2,900 jobs globally and scale back on investments in slower-growing markets as part of a restructuring.

Boeing Co added 1.7% a day after its 737 MAX staged its first post-grounding flight with media on board.

Cloud-security provider Zscaler Inc advanced 11% as it reported better-than-expected first-quarter revenue and adjusted profit.

Waddell & Reed Financial surged 48%, extending gains from the previous session after Australia's Macquarie Group announced a deal to buy the wealth manager for $1.7 billion. (Reporting by Shriya Ramakrishnan and Medha Singh in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty)