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Jobless claims dip, market poised to gain

Stocks are poised for slight gains in early trading, a day after the Dow Jones industrial average had its largest drop in nearly a year.

Wednesday's losses were triggered by reports that suggested that the U.S. economy is slowing. Economic data will likely set the tone again on Thursday.

Before the market opened, the government said that first-time applications for unemployment benefits fell to 422,000. The number was a slight dip from the 424,000 applications the previous week, but still above the 419,000 that economists had expected. Applications below 375,000 are thought to signal consistent job growth.

At the same time, U.S. companies squeezed more work out of their employees in the first three months of the year. But the gain was much slower than in the previous three months, suggesting many employers will need to hire more workers if they want to produce more goods and services.

The Labor Department says productivity rose at an annual rate of 1.8 percent in the January-March period. That was slightly faster than an earlier estimate of 1.6 percent, but significantly lower than the 2.9 percent increase in the October-December period. Unit labor costs rose at a 0.7 percent rate, down from an initial estimate of 1 percent growth.

The revisions reflected more nonfarm business output than previously believed while the drop in unit labor costs reflected lower compensation costs per hour of work.

A separate report later in the morning will detail U.S. factory orders for April.

Ahead of the opening bell, Dow futures are up 14, or 0.1 percent, to 12,288. S&P 500 futures are up 3, or 0.2 percent, to 1,315. Nasdaq 100 futures are up 9, or 0.4 percent, to 2,328. Stock futures do not always accurately predict how stocks will trade once the market opens.

Fears that the economy is stalling sent the Dow Jones industrial average down 280 points Wednesday, erasing more than a quarter of the stock market's gains for the year. Treasury bond yields fell to their lowest level since December as traders put a higher value on safer investments.

Many investors are now focused on Friday, when the government's monthly employment report will be released. Economists expect that the unemployment rate will remain unchanged at 8.9 percent.

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