* S&P 500 coming off three straight days of gains
* European meeting may show bank union progress
* Verizon revenue tops forecasts, profit in line
* Dow up 4 pts, S&P down 1.5 pt, Nasdaq down 3 pts
By Ryan Vlastelica
NEW YORK, Oct 18 (Reuters) - U.S. stock index futures were flat on Thursday as investors looked ahead to jobless claims data and a meeting in Europe designed to make progress in dealing with the region’s debt crisis.
* The S&P 500 has risen for the past three days, lifted by strong earnings from such companies as Johnson & Johnson and Goldman Sachs, though disappointments from IBM and JPMorgan Chase have limited gains.
* While U.S. company earnings have been the primary driver over the past two weeks, market participants continue to closely watch Europe for how it may deal with debt in Spain and Greece. At the European summit, leaders will try to bridge deep differences over plans for a banking union, which is seen as the first stage in a long-term strategy to overhaul the monetary union.
* Still, no substantial decisions are expected, keeping investors cautious over how the region will tackle its three-year-old debt crisis. European shares were down less than 0.1 percent.
* Weekly U.S. jobless claims are due at 8:30 a.m. (1230 GMT) and are seen jumping to 365,000 in the latest week, up from last week’s unexpectedly low 339,000. At 10 a.m., the Philadelphia Federal Reserve Bank releases its September business activity survey. For the survey’s main index, analysts see a reading of 1.0 compared with -1.9 in August.
* S&P 500 futures fell 1.5 point and were about even with 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 added 4 points and Nasdaq 100 futures fell 3 points.
* The S&P has gained 2.3 percent over the past three days, putting the benchmark index just 0.33 percent off its 2012 closing high.
* Morgan Stanley said on Thursday it posted a third-quarter loss per share of $0.55 from continuing operations.
* Property insurance company Travelers Cos Inc said it posted record operating profit in the third quarter, as prices rose and losses from natural disasters fell sharply.
* Still to report on Thursday is Philip Morris, with Microsoft, Google and Advanced Micro Devices all scheduled for release after the market closes.
* Verizon Communications Inc reported results early Thursday, posting revenue that was slightly above expectations. The Dow component said it was on track to meet its 2012 goals.
* Although it’s still early in the earnings season, results have been a bit better than anticipated. With 14 percent of S&P 500 companies having reported, 65 percent have beaten analysts’ expectations, ahead of the long-term average of 62 percent.
* Still, earnings are seen falling 1.7 percent from a year ago, according to Thomson Reuters data. While that represents a modest improvement in expectations from a forecast for a drop of 2.3 percent earlier in the week, it is still the first quarterly decline in three years.
* In China, the country’s latest GDP data suggested it likely hit the bottom of a seven-quarter-long downturn in the third quarter, but the slowest three months of growth since the depths of the financial crisis and a cloudy housing market outlook make recovery prospects tepid.
* The S&P 500 rose for a third straight day on Wednesday as housing starts hit a four-year high, but the Dow was pressured by IBM after it posted weak revenue.