Weekly jobless claims is the data du jour Thursday as markets countdown to Friday's December employment report.

Economists expect 290,000 Americans filed new claims for jobless benefits, off from 298,000 the week earlier. The claims unexpectedly rose in the week earlier after four weeks of declines, but the four-week average was 290,750.

While the claims number is unrelated to the December employment report expected Friday, traders will look for confirmation of an improving employment trend. Claims are reported at 8:30 a.m. ET and consumer credit is expected at 3 p.m.

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Stocks rallied Wednesday, breaking a five-day losing streak as oil stabilized and the ADP private sector payroll report showed 241,000 jobs in December, slightly more than expected. According to Reuters, economists expect 240,000 nonfarm payrolls in the government report Friday, down from a surprise 321,000 payrolls in November.

"If you get a sub-300,000 (claims) number, it will be all good," said Adrian Miller, GMP director of fixed income research. He added that the claims are being watched closely to see if jobs related-data is all on the same path of improvement.

The S&P 500 jumped 1.2 percent to 2025 Wednesday, erasing a good chunk of a 4.8 percent loss made between Dec. 29 and Jan. 6. The ADP report heightened expectations for an upside surprise in Friday's jobs report, which would be a positive catalyst after concerns about Europe and sinking oil prices soured the new year market mood.

Oil prices stabilized Wednesday, with West Texas Intermediate futures for February rising 1.5 percent to $48.65 per barrel, reversing overnight losses. Brent futures rose 0.1 percent to finish at $51.15 per barrel, after falling through $50 a barrel.

Data showing deflation in the euro zone Wednesday raised expectations that the European Central Bank would announce a quantitative easing program later in the month, and that weighed on the euro, sending it to a new 9-year low.

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U.S. yields meanwhile rose, with the 10-year Treasury at 1.97 percent and the 30-year yielding 2.572. Shorter-term Treasurys were mixed late Wednesday after some bond investors viewed the Fed's minutes from its December meeting as slightly dovish.

Five-Day Rule

Stocks have been volatile in the first days of January, and traders are watching to see if the market is higher or lower after its first five days, which end Thursday. The S&P 500 would have to reverse the 1.6 percent loss its seen so far year-to-date and then some to send a positive market signal.