* S&P 500 has gained 1.9 percent over past two sessions
* Q4 GDP revised to show growth, but less than expected
* J.C. Penney, Groupon both sink on weak revenue
* Dow down 1 pt, S&P up 0.8 pt, Nasdaq up 4.25 pts
By Ryan Vlastelica
NEW YORK, Feb 28 (Reuters) - U.S. stock index futures
pointed to a flat open on Thursday as investors found few
reasons to keep pushing markets higher following a sharp two-day
rally and a read on economic growth that was weaker than
Analysts said a pullback may be in store a day after major
equity indexes posted their biggest daily advance since early
January. Over the past two sessions, the S&P 500 has gained 1.9
percent, rising back above the closely watched level of 1,500.
Wall Street has largely resisted expectations it would
undergo a correction, with the Dow Jones industrial average
within striking distance of an all-time high.
The U.S. economy grew 0.1 percent in the fourth quarter, a
weaker pace than expected, although a slightly better
performance in exports and fewer imports led the government to
scratch an earlier estimate of an economic contraction.
Separately, the number of Americans filing new claims for
unemployment benefits fell more than expected last week,
suggesting the labor market recovery was gaining some traction.
"The GDP revision is positive but nothing to write home
about, especially since it missed estimates," said Adam Sarhan,
chief executive of Sarhan Capital in New York.
While markets suffered steep losses earlier in the week on
concerns over European debt, they have since recovered, with the
gains fueled by strong data and comments from Federal Reserve
Chairman Ben Bernanke that showed continued support for the
Fed's economic stimulus policy.
"Bulls are still leading the market with the pullback bought
up quickly, but we're in a wait-and-see period after the big
move we've had," said Sarhan.
S&P 500 futures rose 0.8 point 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 dipped 1
point and Nasdaq 100 futures rose 4.25 points.
So far in February, the S&P 500 has gained 1.2 percent, the
Dow is up 1.6 percent and the Nasdaq has added 0.6 percent.
Investors will also be keeping an eye on the debate in
Washington over sequestration - U.S. government budget cuts that
will take effect starting on Friday if lawmakers fail to reach
an agreement on spending and taxes. President Barack Obama and
Republican congressional leaders arranged to hold last-ditch
talks to prevent the cuts, but expectations were low that any
deal would be produced.
"Investors have come to the realization that sequestration
isn't the end of the world and that it will eventually be
fixed," said Oliver Pursche, president of Gary Goldberg
Financial Services in Suffern, New York. "But going into March
the risk is that the economy slows down and disappoints
Pursche noted that on Feb. 18, about 80 percent of S&P 500
components were above their 50-day moving averages, a rate that
has since dwindled to 60 percent. "Market breadth has narrowed,
and which suggests that a correction of as much as 5 to 6
percent is very likely," he said.
J.C. Penney Co Inc shares slumped 17 percent to
$17.61 in premarket trading after the department store reported
a steep drop in sales on Wednesday. Groupon Inc also
slumped on weak revenue, with the stock off 29 percent at $4.23
before the bell.
Sears Holding Corp rose 2.8 percent to $48.79 in
premarket trading after its earnings and sales beat
With 93 percent of the S&P 500 companies having reported
results so far, 69.5 percent have beaten profit expectations,
compared with a 62 percent average since 1994 and 65 percent
over the past four quarters, according to Thomson Reuters data.
Fourth-quarter earnings for S&P 500 companies are estimated
to have risen 6.2 percent, according to the data, above a 1.9
percent forecast at the start of the earnings season.