Stock futures drop as Apple, Amazon results disappoint; GDP eyed


U.S. stock index futures fell on Friday after technology giants Apple and 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.

Continue Reading Below 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 GMT).

"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 September.

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 economy.

Adding to uncertainty is the impending U.S. presidential election on November 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 Europe.

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 Singulair.

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.

(Editing by Bernadette Baum)