* ECB's Draghi sees euro zone recovery
* Microsoft down after earnings
* Procter & Gamble profit improves
* German business confidence improves
* Futures up: S&P 4.7 pts, Dow 44 pts, Nasdaq 12.5 pts
By Edward Krudy
NEW YORK, Jan 25 (Reuters) - U.S. stock index futures gained
on Friday and the S&P 500 looked set to extend its best winning
streak in more than six years, as rosy earnings from Procter &
Gamble came amid a broader backdrop of healthy corporate
The strong start to the year for the equities market has
also been attributed to agreement in Washington to extend the
government's borrowing power through mid-May, encouraging signs
of recovery in the global economy and seasonal inflows to equity
Those factors helped the S&P 500 rally for a seventh day on
Thursday to a five-year peak. Still, the index is struggling to
climb convincingly above 1,500, a level it surpassed briefly
Thursday for the first time since December 2007.
"You have had more confidence from fund managers to provide
more allocations to equity markets," said Rick Meckler,
president of investment firm LibertyView Capital Management, who
added equities were looking more attractive than bonds or cash.
S&P 500 futures rose 4.7 point 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 44
points and Nasdaq 100 futures rose 12.50 points.
If the S&P 500 rises for an eighth day, it will be its
longest winning in eight years. The index had climbed for nine
straight days in a run that ended in November 2004.
Procter & Gamble, the world's top household products
maker, said Friday quarterly profit soared past expectations and
raised its sales and earnings outlook for the fiscal year.
Shares were up 1.7 pct at $71.58 in premarket trading.
Pointing to a rotation out of bonds, U.S. 30-year Treasury
bonds traded more than a point lower in price on Friday, with
yields touching session highs at 3.10 percent.
Recent company earnings have been encouraging. Thomson
Reuters data through early Thursday showed that of the 133 S&P
500 companies that have reported earnings so far, 66.9 percent
exceeded expectations, more than the 65 percent average over the
past four quarters.
Microsoft Corp's reported lower quarterly profit on
Thursday as Office software sales slowed ahead of a new launch,
offsetting a solid but unspectacular start for its Windows 8
operating system and sending the company's shares down 0.8
percent in premarket trading.
Apple stepped up audits of working conditions at
major suppliers last year, discovering multiple cases of
underage workers, discrimination and wage problems. The shares,
which fell 12 percent Thursday after disappointing earnings,
edged up 0.6 percent to $453.40.
German business morale improved for a third consecutive
month in January to its highest in more than half a year,
providing further evidence that growth in Europe's largest
economy was gathering speed after contracting late last year.
Echoing a more positive tone in Europe, ECB President Mario
Draghi said he expects the euro zone economy to recover later
this year, adding that financial market improvements have not
yet trickled into the general economy. Draghi was speaking at
the World Economic Forum in Davos on Friday.
The U.S. Commerce Department releases new home sales data
for December at 10:00 a.m. (1500 GMT). Economists forecast a
total of 385,000 annualized units, compared with 377,000 in
Economic Cycle Research Institute releases its weekly index
of economic activity for Jan. 18 at 10:30 a.m. (1530 GMT). In
the prior week the index read 130.