* Apple, Amazon earnings disappoint
* GDP, UMich data on tap
* Futures down: Dow 106 pts, S&P 10.1 pts, Nasdaq 12.75 pts
By Chuck Mikolajczak
NEW YORK, Oct 26 (Reuters) - U.S. stock index futures fell
on Friday after technology giants Apple and Amazon.com reported
lackluster earnings and outlooks, in line with a recent ream of
cautious corporate forecasts, and ahead of economic growth data.
Apple Inc, the world's largest company by market
capitalization, reported a second straight quarter of
disappointing results and iPad sales fell well short of
analysts' targets. The company also forecast revenue and margins
below Wall Street forecasts.
Amazon.com Inc after posting its first quarterly
net loss in more than five years. It forecast fourth-quarter
revenue that fell short of analysts' expectations.
Both companies reversed early declines in premarket trading,
however, with Apple up 0.3 percent at $611.40 and Amazon up 0.5
percent at $224.06.
Investors will eye the Commerce Department's first estimate
of third-quarter gross domestic product at 8:30 a.m. EDT (1230
"You have some expectation given earnings and what is
happening in the world and what you can see by walking around in
your own little corner - the best thing that can happen is that
it meets expectations today," said Kim Forrest, senior equity
research analyst at Fort Pitt Capital Group in Pittsburgh.
"If it does fall short, all you are doing is confirming what
we've seen so far in the revenue expectations of companies."
Analysts polled by Reuters earlier this week expect growth
of 1.9 percent, faster than the 1.3 percent pace of the second
quarter, but not brisk enough to quickly bring down the
unemployment rate. Some economists scaled back their forecasts
on Thursday after signs of weakness in durable goods orders in
The S&P 500 has dropped 1.4 percent this week as dismal
corporate earnings and cautious outlooks, especially from large
multinationals, have painted a gloomy picture of the global
Adding to uncertainty is the impending U.S. presidential
election on Nov. 6, which, along with earnings and growth
worries, has helped drop the benchmark S&P index to below a key
support level, the 50-day moving average, at around 1,434.
Still, many analysts expect the retreat to wane near 1,400
or 1,375, as the Federal Reserve's latest stimulus policy puts a
floor under equity prices.
With 244 companies in the S&P 500 having reported, 62.3
percent have beaten earnings expectations, a tad better than the
typical 62 percent average, Thomson Reuters data showed.
Revenue for the quarter has been more disappointing, with
just 36.3 percent of companies reporting higher-than-expected
revenue - compared with a historic beat rate of 62 percent.
S&P 500 futures fell 10.1 points and were below 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 lost 106
points, and Nasdaq 100 futures declined 12.75 points.
Economic data expected later in the session includes the
Thomson Reuters/University of Michigan Surveys of Consumers
final October consumer sentiment index at 9:55 a.m. (1355 GMT).
Economists in a Reuters survey expect a reading of 83.0 compared
with 83.1 in the preliminary October report.
Goodyear Tire & Rubber Co slumped 3.7 percent to
$11.85 in premarket trading after the top U.S. tire maker said
quarterly profit fell amid lower volumes, particularly in
Dow component Merck & Co Inc reported
better-than-expected third-quarter profit, as a favorable tax
rate and lower merger costs offset plunging sales of asthma drug
Newell Rubbermaid Inc reported a
higher-than-expected quarterly profit and raised its quarterly
dividend by 50 percent to 15 cents a share but also said it
would cut about 2,000 jobs over the next 2 1/2 years as it
attempts to combat slower sales.
European equity markets eased, on track for their worst week
in a month on the back of a raft of gloomy corporate outlooks
and a darkening technicals picture.
Asian shares and commodities slid as investors shunned risk
on concerns over corporate earnings, with the region's exporters
struggling against shrinking global demand.