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The personal computer maker, which vies with Acer Inc for the No. 2 spot in the global PC market, expects stable demand from government and corporate customers and favorable component prices this current quarter.

Analysts pointed to a big beat on Dell's closely watched gross margin number: 20 percent in the third quarter on a non-GAAP basis versus expectations of 17.5 percent.

"Gross margins jumps out at you from what we've seen so far. That's a level we haven't seen for a long time from this firm," said Morningstar analyst Michael Holt.

Analysts said Dell still had to prove to investors its improvement could be sustained. The company did caution that margins would be "tempered" on a mix shift toward the consumer business during the holiday quarter.

"Leverage in the model is going to be key as people gauge the sustainability of what was a very strong gross margin number," said Stifel Nicolaus analyst Aaron Rakers.

Dell, which benefited from falling prices for components such as hard drives and screens, also credited its discipline on pricing war for shoring up margins.

As corporations continue to upgrade aging hardware, sales in Dell's large enterprise business rose 27 percent amid good demand for desktop PCs, servers and networking.

"We see stable and good commercial demand for the business, and the component environment, we expect that to continue, and as a result, we think we should have a pretty solid fourth quarter," CFO Brian Gladden told Reuters in a phone interview.

Gladden also waved off fears that government budget cuts would eat into its business. Dell exposure to weakening government spending was a major question mark following a warning by Cisco Systems last week about weak public-sector spending.

The share price rally following the earnings report reversed a 6 percent loss in Dell's shares since Cisco's warning last Wednesday. Dell's shares were halted after-hours before rising 4.8 percent to $14.32 from their close of $13.67 on Nasdaq.

IN TURNAROUND

Dell's turnaround effort has proceeded in fits and starts over the past few years, frustrating investors. The company has used M&A to try to diversify its portfolio, but it remains heavily reliant on sales of low margin PCs, which still make up half of its sales.

"I believe the third-quarter results are beginning to demonstrate that the strategy we have described to you over the past year is the correct one," Chief Executive Michael Dell on a conference call with analysts.

The company's top line has benefited from the corporate refresh cycle, but Dell has been challenged to translate sales growth into improved profitability.

Major banks admitted to sloppy documentation to a House of Representatives' subcommittee but said they had taken steps to tighten procedures and that the basis of their foreclosures has been accurate.

Federal regulators said they learned of the problems from news reports but are now actively reviewing banks' work and plan to issue their findings in January.

It was the second congressional hearing this week into revelations that lenders used "robo-signers" to sign hundreds of foreclosure documents a day, without proper legal reviews.

"I want to know, given the problems in the mortgage servicing industry -- problems which have been apparent for years -- what are government and industry witnesses intend to do to fix these problems and why any of them should keep their jobs," Maxine Waters, who chairs the House Financial Services housing subcommittee, said at the outset of the hearing.

Lawmakers threw most of their best jabs at regulators, who testified first, while a panel with bank executives, who were sworn in as witnesses by Waters, was sparsely attended.

Officials from the Federal Reserve and other bank regulators appeared ahead of executives from Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial.

The U.S. housing industry remains in a multi-year slump that followed years of easy lending; a collapse that precipitated the recent financial crisis and the worst economic downturn since the 1930s.

Banks have now repossessed just over three million homes through October since January of 2007, according to real estate data firm RealtyTrac.

MULTIPLE PROBES

Mortgage servicing and foreclosure practices are being investigated by both federal officials and all 50 state attorneys general.

John Walsh, acting comptroller of the currency, said the problems were isolated at specific institutions, rather than a widespread industry issue. "I am not aware of a reason to believe there is a systemic failing of the system," he said.

The paperwork fiasco has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

Waters repeatedly questioned whether regulators had gone far enough in their penalties and oversight. "Why should take you seriously?" she asked.

Walsh said examiners were focused on monitoring banks' mortgage modification programs, rather than keeping a close watch on how they processed foreclosures.

Initial claims for state unemployment benefits climbed 2,000 to a seasonally adjusted 439,000, the Labor Department said on Thursday. Economists polled by Reuters had forecast claims rising to 440,000 from the previously reported 435,000.

"It's showing some hope that there is a recovery in labor demand," said Nick Kalivas, analyst at MF Global in Chicago.

U.S. stock index futures held gains after the data, while Treasury debt prices were little changed.

The data covered the survey week for the government's employment report for November, but weekly claims have been too volatile to provide a good prediction of nonfarm payrolls.

A Labor Department official said there was nothing unusual in the state-level data.

The four-week average of new jobless claims, considered a better measure of underlying labor market trends, dropped 4,000 to 443,000, the lowest level since the week ending September 6, 2008.

Despite the rise in initial claims last week, the labor market distress is showing signs of easing, with payrolls data showing employers adding jobs last month for the first time since May.

The anemic labor market was a key factor in the Federal Reserve's controversial November 3 decision to stimulate the economy through purchases of an additional $600 billion worth of government bonds.

The number of people still receiving benefits after an initial week of aid fell 48,000 to 4.30 million in the week ended November 6, in line with expectations and the lowest since November 2008. The prior week's figure was revised up to 4.34 million.

The number of people on emergency unemployment benefits rose 66,767 to 3.97 million in the week ended October 30. A total of 8.85 million people were claiming unemployment benefits during that period under all programs.

Jobless benefits for 800,000 people will expire on November 30 unless Congress renews them. In total, two million unemployed people would lose benefits by the end of December.

The benefits have been renewed several times as the country struggles with a 9.6 percent unemployment rate.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Nearly 60 million Americans plan to hit the stores, while an additional 78 million might join the crowds of shoppers, the National Retail Federation said.

The total number of possible shoppers is 4 million more than forecast last year, when the NRF forecast 134 million Americans would be out shopping over the three-day weekend.

The group does a follow-up survey to ascertain how many of those consumers actually did shop over the weekend, but it includes shoppers on Thanksgiving day.

Black Friday, which falls on November 26, is a key date for retailers, representing the traditional post-Thanksgiving kickoff to the holiday shopping season.

Retailers from Macy's Inc to Best Buy Co Inc try to lure shoppers through "door-buster" deals offering low prices on coveted gifts and the deals continue throughout the weekend.

The higher turnout expected for the Black Friday weekend supports an earlier NRF forecast of a 2.3 percent increase in sales in November and December, compared with a 0.4 percent increase in 2009.

In 2008, during the worst financial crisis in decades, sales fell by 3.9 percent.

The widely-expected uptick in shopping this year is welcomed by retailers, but they remain wary, leaving little to chance in their fight for holiday sales. Knowing consumers are still hesitant to spend and are looking to save money, many are focused on increasing sales by poaching customers from their rivals.

Amid high unemployment and a tepid economic recovery, more U.S. consumers are paring back their spending for the holiday season, according to a survey from consumer research firm America's Research Group.

This year's higher forecast for Black Friday shoppers is smaller than the change from 2008 to 2009, when an additional 6 million shoppers were expected.

(Reporting by Jon Lentz; editing by Andre Grenon)

At 0952 GMT (4:52 a.m. ET), futures for the Dow Jones, S&P 500 and Nasdaq were up between 0.8 and 1.2 percent.

The FTSEurofirst 300 .FTEU3 index of leading European shares was up 1 percent at 1,103.56 points, with heavyweight banks among the biggest risers.

The dollar fell against the euro after subdued U.S. inflation supported the Federal Reserve's case for quantitative easing, while Asian shares rebounded after an eight-day sell-off.

Ireland's central bank chief said he expected the country to receive tens of billions of euros in loans from European partners and the IMF to help shore up its shattered banks and stabilize the economy.

General Motors Co GM.UL shares will start trading after it pulled off the biggest initial public offering in U.S. history on Wednesday, raising $20.1 billion after pricing shares at the top of the proposed range in response to huge investor demand.

Under fire over their foreclosure practices, bankers head back to Capitol Hill, facing heightened pressure to find ways to keep borrowers in their homes. The hearings, which began in the Senate on Tuesday and continue on Thursday in the House of Representatives, have been the first appearances by executives from major lenders like Bank of America (BAC.N) and JPMorgan Chase (JPM.N) since the furor over sloppy foreclosure paperwork erupted in September.

Weekly jobless claims data is due at 1330 GMT, giving an indication of the strength of the recovery in the world's biggest economy.

Leading indicators data is due at 1500 GMT.

Sears (SHLD.O) is expected to report a loss of $1.08 per share, slightly less than the $1.10 per share it lost in the same period one year ago. The market will want to know how the retailer plans to combat rising apparel costs.

Fashion retailer Gap (GPS.N) is expected to post a rise in third-quarter profit. Traffic trends have improved at stores.

Office supplies company Staples (SPLS.O) is among other companies set to report.

Due after the market closes, Dell's (DELL.O) results should have seen some benefit from easing component prices and still strong enterprise PC demand in the third quarter.

A late sell-off in banks on Wednesday saw U.S. indexes ending mixed.

The Dow Jones industrial average .DJI fell 0.14 percent; the Standard & Poor's 500 Index .SPX edged up 0.02 percent; the Nasdaq Composite Index .IXIC added 0.25 percent1.

Limited Brands Inc (LTD.N) shares rose 2.3 percent after the bell following its results.

(Reporting by Brian Gorman; Editing by Jon Loades-Carter)

Hopes that Ireland will soon see a solution to its debt crisis supported stocks, which have been dogged by uncertainty about how Europe would tackle Ireland's debt woes and fears that China may take aggressive steps to curb inflation.

Such factors had helped exacerbate a recent sell-off in risky assets and a rally in the dollar that traders say was partly due to investors trimming their bets before market liquidity dwindles toward the year-end.

Major European shares .FTEU3 rose 0.4 percent in early trade, following gains in Asia.

The euro and Asian equities gained some respite after Ireland agreed to work with EU and IMF officials on steps to shore up its shattered banking sector.

The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose 1 percent to 461.43. It had slid for eight straight sessions up to Wednesday, shedding 5.7 percent.

"After some signs of overheating there had been a bit of a pullback on concerns about potential interest rate rises in emerging markets," said Mitsushige Akino, chief fund manger for Ichiyoshi Investment Management in Tokyo, referring to Asian equities.

"But at the base there is QE2, with the amount of money swelling and heading toward risky assets," Akino said, adding that investors were likely to continue to look to buy Asian equities when they dip.

Shanghai shares rose 0.9 percent .SSEC and Hong Kong equities gained 1.7 percent .HSI as investors picked up beaten down shares, although sentiment remained fragile as worries persisted that China may adopt steps to curb inflation including more aggressive hikes in key interest rates.

Japanese equities outperformed their Asian peers, with the Nikkei .N225 up 2.1 percent to a five-month high of 10,013.63.

Market players said short-covering of Japanese financial shares by overseas funds helped spur similar moves in other sectors, with some saying the buying of Japanese equities was led by European funds balancing their positions ahead of year-end book closings.

The yen's recent dip against the dollar also helped boost Japan's benchmark index.

"Foreign fund operators were unloading Japanese government bonds positions while buying back Nikkei futures, driving the overall upward move in stocks," said Takashi Ohba, a senior strategist at Okasan Securities.

The dollar held steady at 83.21 yen, near a six-week high of 83.60 yen hit on Tuesday on trading platform EBS.

The euro rose 0.5 percent to $1.3595, pulling away from Tuesday's seven-week trough of $1.3446.