Banks bolster stock futures

Stock index futures pointed to a higher open on Thursday after Wells Fargo gave preliminary first-quarter results that were stronger than expected.

Wells Fargo shares jumped nearly 29 percent to $19.14 after the bank said that it expects to report a record $3 billion in net income for the first quarter.

The health of banks has been a crucial factor behind the stock market's sentiment and the news followed a New York Times report that all 19 banks undergoing the government's stress tests will pass, but many of the largest lenders will probably need to be bailed out again.

Shares of Citigroup rose 10 percent to $2.97 while Bank of America surged nearly 15 percent to $8.10 in premarket trade.

The table is set to exceed on the upside for a lot of these guys considering expectations are so low, and certainly Wells Fargo blew the cover off the ball, said Matt McCormick, Portfolio Manager and banking analyst at Bahl & Gaynor Investment Counsel, Inc in Cincinnati.

In this terrible environment, to exceed on the upside is going to raise the bar pretty high.

S&P 500 futures rose 15.50 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 gained 127 points, and Nasdaq 100 futures added 19.50 points.

A bigger than expected drop in initial jobless claims, to 654,000, also contributed to the rise in futures.

Retailers will be in focus as they report monthly sales results. Dow component Wal-Mart reported a lower-than-expected 1.4 percent rise in U.S. stores open at least a year but forecast quarterly earnings at the high end of its prior view.

Shares fell 5 percent to $50.

Beleaguered automaker General Motors plans to double its vehicle sales in China to more than 2 million units by 2013, the Shanghai Securities News said on Thursday, citing company executives as vehicle sales in the world's largest car market climbed to a record high in March.

Shares of General Motors jumped 9.3 percent to $2.11 in premarket trade.

U.S. stocks snapped a two-day slide on Wednesday on news the government is shoring up life insurers and optimism about consumer spending after Bed Bath & Beyond Inc reported a better-than-expected profit.

(Reporting by Chuck Mikolajczak; Editing by Theodore d'Afflisio)