North American markets are likely to open flat Thursday as investors digest disappointing U.S. economic reports on weekly jobless claims and durable-goods orders for May.

Demand for U.S. durable goods took a surprising drop during May, falling a second straight month as orders for computers and cars and car parts decreased.

Durable-goods orders declined 1.6% to US$189.1 billion last month, the Commerce Department said today. Non-defense capital goods excluding aircraft — a barometer of business spending — fell 3%, after decreasing 2% in April.

The data showed April demand decreased 2.6% as opposed to a previously reported 3.2% drop. It was the first set of back-to-back decreases since late 2002. March orders were unrevised at a 5.9% increase.

The report on May durables was far weaker than expected on Wall Street. Economists had forecast orders up 1.2%.

Meanwhile, U.S. initial jobless claims rose by 13,000 to a seasonally adjusted level of 349,000 in the week that ended June 19, the Labor Department said today. The four-week average also rose slightly — by 1,000 to 344,250. Economists say an average below 350,000 is usually a sign that jobs are growing.

There are no major economic releases from Statistics Canada today.

In this morning’s earnings news, graphics chip maker ATI Technologies Inc. said its third-quarter profit more than tripled to US$48.6 million as sales revenue soared 38.2% to a record US$491.5 million.

Net income for the quarter ended May 31 amounted to US20¢a share and compared with US$15 million, or US6¢ a share a year earlier.

On Wednesday software firm Cognos said its profit for the first quarter ended May 31 amounted to $20.1 million, or 22¢ a share, up from $12.4 million, or 14¢ a share, a year ago. Revenue was $173.6 million, up from $150.6 million a year ago.

Stocks surged in Hong Kong and Tokyo shares hit a two-month closing high overnight.

Japan’s Nikkei stock average of 225 stocks jumped 163.59 points, or 1.41%, to 11,744.15. That’s its highest close since the April 30 finish of 11,761.79.

In Hong Kong, the Hang Seng index rose 313.91 points, or 2.65%, to 12,163.68.

Toronto stocks made moderate gains Wednesday, the S&P/TSX composite Index rose 57.55 to 8,575.41. However, the junior S&P/TSX Venture composite index slipped 8.87 points to 1,560.09.

On Wall Street, the Dow Jones industrial average closed up 84.87 points at 10,479.94. The tech-heavy Nasdaq composite index added up 26.83 points, or 1.35%, to finish at 2,020.98. The broader S&P 500 Index finished up 9.63 points at 1,144.04 — a 10-week high.