* Media report lifts futures, could indicate cliff progress
* S&P 500 heading for second straight week of steep losses
* Dell shares fall before open as profit slides 47 percent
* Futures up: Dow 8 pts, S&P 4.4 pts, Nasdaq 9.5 pts
By Ryan Vlastelica
NEW YORK, Nov 16 (Reuters) - U.S. stock index futures
pointed to a higher open on Friday, reversing earlier weakness,
after the Wall Street Journal reported White House officials
were in discussions that could indicate increased flexibility to
negotiate on the "fiscal cliff."
Citing sources familiar with the matter, the Journal said
officials were in advanced, internal talks to replace spending
cuts set to begin in January with a separate package of spending
cuts and tax increases. The White House had no comment on the
Investors have been concerned that if no deal was reached on
the large, automatic budget cuts and tax hikes set to begin next
year, the economy could slip into recession. The S&P is down 4.3
percent over the past two weeks.
"I have to believe the government will come to some kind of
resolution, but every day that passes without any progress is
another day where the path of least resistance will be down,"
said Robert Pavlik, chief market strategist at Banyan Partners
LLC in New York.
Democrats and Republicans appeared to dig in their heels
into opposing positions, echoing last year's political impasse
over raising the U.S. debt ceiling.
President Barack Obama spokesman Jay Carney told reporters
the president wouldn't sign, "under any circumstances, an
extension of tax cuts for the top 2 percent of American
earners," while Senate Republican leader Mitch McConnell said
Republicans won't raise tax rates, echoing
Obama and congressional leaders are meeting for budget and
tax talks on Friday, a meeting scheduled to begin at 10:15 a.m
(15:15 GMT) at the White House.
Concerns over the cliff have pressured stocks ever since the
Nov. 6 presidential election. Even with the rise in futures the
S&P is on track to notch a second straight week of losses of
more than 1 percent.
S&P 500 futures rose 4.4 points and were above 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 rose 8
points and Nasdaq 100 futures added 9.5 points.
The S&P is currently down 1.9 percent for the week, while
the Dow is off 2.1 percent and the Nasdaq is down 2.3 percent.
The S&P 500 sunk to a 3 1/2-month closing low on Thursday and
remained well below its 200-day moving average, which it
pierced last week.
While the S&P remains up 7.6 percent for the year, what had
looked like a stellar 2012 for stocks has turned into merely an
average year. Though some investors have become more inclined to
protect their gains as 2012 draws to a close, others view the
decline as a buying opportunity.
"I think we're closer to the end of this decline than to the
beginning, and valuations are becoming extremely attractive,"
Pavlik said. "If you're not putting a buying list together,
you're doing yourself a disservice."
Dell Inc will be in focus a day after reporting a
steep drop in its quarterly profit. Shares fell 2.2 percent to
$9.35 in premarket trading.
Sears Holdings Corp late Thursday reported a
quarterly loss that was narrower than expected, but same-store
sales fell on weak demand for electronics, sending shares down
5.8 percent to $55.11 before the bell. Gap Inc raised
its full-year profit view, quelling concerns of a slowdown going
into the holiday season. Gap shares rose 4 percent to $34.60.
J.M. Smucker Co reported a rise in second-quarter
earnings, helped by a drop in commodity costs.
A flare-up in violence in the Middle East added to market
unease as Israeli warplanes bombed targets in and around Gaza
city for a second day, while two rockets fired from the Gaza
Strip targeted Tel Aviv.