Stock futures steady after big jump a day earlier; reports from Microsoft, Amazon curb gains

Stock futures steady after prior day’s big jump

NEW YORK — Investors are taking a breather after a surge in stocks, with futures little changed ahead of the market’s open on Friday.

Initially, futures moved higher, buoyed by gains in overseas markets that came after Wall Street’s stunning advance Thursday in which the Dow Jones industrials jumped almost 190 points to their first close above the 9,000 mark since early January.

Some disappointing earnings news from companies like Microsoft Corp. and Amazon.com Inc. are weighing on the market.

Microsoft shares dropped more than 7 percent in premarket trading Friday after the tech giant said late Thursday its revenue fell short of analysts’ expectations. Amazon.com also reported weaker-than-expected sales, and its shares fell more than 5 percent ahead of the opening Friday.

The reports underscore the prevailing theme of earnings season thus far: Companies have been able to report better-than-expected earnings in large part because of aggressive cost-cutting measures, not stronger sales. Revenue at some companies is still sagging as consumers forgo spending to shore up their savings amid the ongoing recession.

Still, investors have taken the improved results as confirmation that the economy is indeed healing and that a turnaround is possible by the end of this year.

On Thursday, news that existing home sales rose in June for the third straight month and by more than economists had expected added to the market’s optimism.

In just nine days, both the Dow and the Standard & Poor’s 500 index have climbed 11 percent, reigniting a rally that carried the market up as much as 40 percent this spring. That rally fizzled last month as still growing unemployment and weak consumer confidence fed doubts about the economy’s recovery.

Despite the market’s impressive performance over the past two weeks, analysts warn that investors still has a number of obstacles to contend with, including earnings reports from retailers that will provide more insight into the financial health of the consumer.

Ahead of the market’s open, Dow Jones industrial average futures are down 4, or 0.04 percent, to 8,987, while Standard & Poor’s 500 index futures are down 1.40, or 0.1 percent, to 967.50. Nasdaq 100 index futures slipped 7.50, or 0.5 percent, to 1,576.50.

Bond prices fell in early trading. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.69 percent from 3.67 percent late Thursday.

Among the day’s earnings news, Schlumberger Ltd., the world’s largest oilfield services company, said its second-quarter earnings dropped 57 percent as oil and natural gas companies scaled back their exploration and drilling activities. But excluding one-time items, the company beat Wall Street’s expectations. Shares fell $1.15 to $56.62 in premarket trading.

Microsoft shares fell $1.93 to $23.63, while Amazon.com shares dropped $5.48 to $88.39.

CIT Group Inc. was back in focus Friday. The troubled commercial lender said it is amending the terms of a tender offer for its notes and warned it may have to seek bankruptcy protection if enough bondholders don’t agree to the new terms.

The company said in a regulatory filing Friday that if the offer is successful it won’t file for bankruptcy and will pursue a restructuring through other unspecified ways.

Earlier this week, news that bondholders had come to the rescue of the lender helped lift markets.

The dollar was mixed against other major currencies, while gold prices hovered around $950 an ounce.

Oil prices inched higher in premarket trading on the New York Mercantile Exchange, rising 13 cents to $67.29 a barrel.

Overseas, Japan’s Nikkei stock average jumped 1.6 percent, while Hong Kong’s Hang Seng index gained 0.8 percent. The Hang Seng stands at its highest level in 10 months. In afternoon trading in Europe, Britain’s FTSE 100 rose 0.5 percent, Germany’s DAX index slipped 0.1 percent, and France’s CAC-40 added 0.2 percent.