Wall Street was set to rise on Thursday as higher profit from JPMorgan offset concern about closing the U.S. budget deficit after Moody's threatened to downgrade the United States' top credit rating.

A report showing new claims for U.S. jobless benefits fell slightly last week also looked set to buoy stocks.

JPMorgan's results were welcomed by investors who have been buffeted by worries about excessive government debt at home and in Europe. The bank's forecast-beating quarter came as it wrote off fewer bad mortgages and credit card loans, sending the shares up 2.5 percent to $40.60 in premarket trading.

But analysts said deadlocked debate over budget cuts and raising the U.S. debt ceiling would weigh on the market after Moody's warned that the United States could lose its top credit rating if lawmakers fail to increase the borrowing limit.

The action from Moody's came shortly after the ratings agency gave Portuguese debt a junk rating and as Europe's debt crisis appears to be spreading.

That (European debt) and the countdown to the debt ceiling are what's going to prevail in the market, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

S&P 500 futures rose 5.2 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 rose 30 points, and Nasdaq 100 futures added 10.25 points.

U.S. President Barack Obama clashed with Republican lawmakers on Wednesday in a fierce White House meeting on deficit reduction that left a deal in question as the clock ticked toward a debt default.

Euro zone countries continued to grapple with the thorny issue of involving the private sector in tackling Greece's debt pile as they prepared for a meeting to decide support for the country next week.

Also set to report results, Google is expected to report a rise in earnings per share to $0.71 from $0.68 a year earlier. Its newly released social networking service, dubbed Google+ will be in the spotlight. The shares rose 0.6 percent to $541.64.

Wall Street ended higher on Wednesday on expectations further stimulus measures could be on the horizon after the U.S. Federal Reserve Chairman Ben Bernanke said the Fed is ready to ease monetary policy further if economic growth and inflation slow much more.

Shares of Yum! Brands rose 2.7 percent to $57.10 as the fast-food firm raised its full-year earnings forecast late on Wednesday after China helped deliver quarterly earnings for the company that topped Wall Street's forecast.

Marriott International Inc fell more than 4 percent as the hotel firm reported higher quarterly earnings that matched analyst estimates and gave a tepid forecast for the year, also late Wednesday.

(Editing by Kenneth Barry)

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