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Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 418,000, the Labor Department said.

Economists polled by Reuters had forecast claims dropping to 420,000 from a previously reported 428,000. The prior week's figure was revised up to 432,000.

The data has as no bearing on the government's closely watched employment for June, scheduled for release on Friday and expected to show that nonfarm payrolls increased 90,000 last month after rising only 54,000 in May.

While the improvement in claims at the start of the third quarter could be hopeful sign that conditions were now in place for the economy to regain the momentum lost in the first half, the report itself does not offer a clear read of the labor market.

A Labor Department official said given Monday's Independence Day holiday, California and Virginia had provided partial estimates. In addition, the department had to make estimates for four states and territories.

The data also included about 2,500 claims from state employees in Minnesota following the shutdown on Thursday of the state government.

It was the 13th straight week that claims have been above 400,000, a level that is usually associated with a stable labor market.

The four-week moving average of unemployment claims, a better measure of underlying trends, fell 3,000 to 424,750.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 43,000 to 3.68 million in the week ended June 25.

The number of people on emergency unemployment benefits declined 44,183 to 3.26 million in the week ended June 18, the latest week for which data is available. A total of 7.46 million people were claiming unemployment benefits during that period under all programs, down 61,327 from the prior week. (Reporting by Lucia Mutikani, Editing by Andrea Ricci)

* Futures for the Dow Jones, S&P 500 and Nasdaq were all up 0.3 percent at 0855 GMT.

* The FTSEurofirst 300 .FTEU3 index of leading European shares was up 0.3 percent, with traders cautious ahead of an expected rate rise by the European Central Bank.

* The euro fell broadly on Thursday as investors looked beyond the rate rise to focus on the worsening euro zone debt crisis.

* The ADP national employment report was expected to show U.S. private hiring increased 68,000 in June after 38,000 in May, a month that probably took the brunt of temporary factors such as layoffs from auto shutdowns. It will also give a valuable signal regarding the relative health of the service sector labor market. The ADP report comes ahead of Friday's closely watched non-farm payrolls data.

* Weekly initial jobless claims were expected to have fallen slightly to 420,000 in the week ending July 2, from claims of 428,000 the prior week.

* After weeks of impasse, President Barack Obama and top congressional leaders were aiming for "something big" when they resume budget talks on Thursday to avert an imminent default. [nN1E76523G]

* More U.S. consumers had trouble making payments on credit cards and other debts during the first three months of the year due to higher food and gas prices, an industry report said. [nN1E7651VT]

* The New York Stock Exchange was expected to take a crucial step toward ceding control to a German company on Thursday, with little opposition expected from investors. NYSE Euronext (NYX.N) shareholders were voting on whether to back a $9.4 billion takeover of the company that owns the NYSE by Deutsche Boerse (DB1Gn.DE). The deal was expected to get the needed 50 percent majority support from investors, including T. Rowe Price and other big U.S. fund companies.

* U.S. stocks rose on Wednesday even though data showed weaker growth in the services sector, with traders saying markets had an "upward bias" after last week's surge.

* The Dow Jones industrial average .DJI was up 56.15 points, or 0.45 percent, at 12,626.02, the highest close since mid-May. The Standard & Poor's 500 Index .SPX was up 1.34 points, or 0.10 percent, at 1,339.22. The Nasdaq Composite Index .IXIC was up 8.25 points, or 0.29 percent, at 2,834.02.

(Reporting by Brian Gorman; Editing by Dan Lalor)

Banks will meet with lobbying group the Institute of International Finance (IIF) in Rome on Thursday, an Italian Treasury source said.

Thursday's meeting follows similar talks organized by the IIF in Paris on Wednesday at which "a menu of options" was discussed for involving private sector creditors in an aid package for Greece, according to Charles Dallara, the managing director of the bank lobby group.

The officials are trying to work out a solution which would enable private sector creditors to take part in a voluntary deal which would not be defined as a default by ratings agencies but agreement is proving complicated.

A French proposal for a rollover in which bondholders would reinvest at least 70 percent of the proceeds from bonds maturing before the end of 2014 in new 30-year Greek debt has run into ratings agency objections.

Officials are now looking at a broader range of options.

"There's going to be an exchange of views on developments so far and the solutions currently on the table for the involvement of private creditors," the Treasury source said.

"Different possibilities will be discussed, not just one solution," the source added.

The meeting will be chaired by Vittorio Grilli, director general of the Italian Treasury, in his capacity as chairman of the European Union Economic and Financial Committee.

Officials from the European Central Bank and the Greek government as well as international and Italian banking executives will attend, the source said.

An EU source also confirmed the meeting will take place in Rome and EU representatives will be attending, however, no representative from any of the ratings agencies is expected to be present.

On Thursday, Dutch Finance Minister Jan Kees de Jager was quoted by the daily Het Financieele Dagblad as saying that private sector banks must be pressured into taking part in a bailout as a voluntary deal was not realistic.

(Reporting by Francesca Landini; editing by Patrick Graham)

NYSE Euronext shareholders are voting on whether to back a $9.4 billion takeover of the company that owns the NYSE by Deutsche Boerse AG. The deal is expected to get the needed 50 percent majority support from investors, including T. Rowe Price and other big U.S. fund companies.

The vote is set to begin at 8:00 a.m. Eastern.

The exchanges have promoted the deal as a merger of equals -- in part because it allows Big Board Chief Executive Duncan Niederauer to run the combined entity. The larger Frankfurt-based bourse, however, would control 10 of 17 board positions, while its shareholders will own roughly 60 percent of a yet-to-be-named Netherlands-based holding company.

If roadblocks to the blockbuster deal emerge, they are likely to come from Europe. The deal requires approval from 75 percent of Deutsche Boerse shareholders by Wednesday of next week and then would have to survive a thorny European Commission antitrust review that could run through the rest of the year.

The tie-up between NYSE and the German exchange was announced in February amid a flurry of cross-border deal attempts by exchanges eager to cut costs and diversify in the face of fast-eroding market shares in their traditional stock-trading businesses.

The London Stock Exchange Group Plc and Canada's TMX Group Inc headed into negotiations, as did the Singapore Exchange Ltd and Australia's ASX Ltd. One by one, however, those and other deals collapsed, shattered by political and nationalistic resistance.

NYSE Euronext itself was the target of an unsolicited counter-bid in April from archrival Nasdaq OMX Group Inc and its commodities partner, the IntercontinentalExchange Inc in April. The aggressors retreated in May after being rejected by the U.S. Department of Justice over antitrust concerns.

A NYSE-Deutsche Boerse combination would produce a behemoth that offers trades in virtually every U.S. and European asset class, with annual trading volume exceeding $20 trillion. It also explains why European antitrust regulators are expected to take a close look at the near lock the company would have on exchange-traded derivatives -- and possibly demand some divestitures or other concessions.

There have been few public critics of the deal in the United States, despite the NYSE's symbolism as a bastion of American capitalism. The exchange was founded in 1792 when share trading began under a buttonwood tree on a block now designated as Wall Street.

To woo votes, Niederauer and his Deutsche Boerse counterpart, Reto Francioni, have been telling shareholders they expect to achieve cost savings from the combination of at least 500 million euros ($715 million), ramped up from an initial projection of 300 million euros ($429 million). They also have promised a special dividend of 2 euros per share ($2.86 per share) after the deal closes.

Under the terms of the deal, Francioni would be chairman of the combined entity.

NYSE shares are up nearly 15 percent this year, but have fallen about 9.7 percent since the exchange said it was in advanced talks on February 9. Deutsche Boerse shares are down 8.9 percent since February 9 and up 2.8 percent year to date.

(Reporting by Jonathan Spicer; additional reporting by Paritosh Bansal; editing by Jed Horowitz and Andre Grenon)