Stock index futures pointed to a lower open on Friday after Citigroup and Bank of America as well as bellwether GE posted disappointing revenues, underscoring corporate America's struggles against economic headwinds.
Consumer prices fell for a third straight month in June, suggesting sluggish domestic demand and subdued inflation pressures.
If you look at the producer price index yesterday and the CPI today, it certainly looks like we're entering a deflationary period, said Gary Shilling, president of an investment research firm in Springfield, New Jersey. More people are getting concerned about this, and the Fed signaled that it's also pretty concerned.
Conglomerate General Electric Co , Bank of America Corp and Citigroup Inc all reported second-quarter earnings that beat expectations, but their stocks slid after revenues fell from the prior year. The two banks also posted declines in quarterly profits.
GE shares were little changed in premarket trading, while Bank of America fell 4.2 percent to $14.75, and Citigroup was down 1.7 percent at $4.09.
Citigroup's results reflect a significant improvement in credit quality, but little in the way of identifying how they're going to go from that to revenue growth, said Marshall Front, chairman of Front Barnett Associates in Chicago.
The three major stock indexes have risen seven out of the past eight sessions as a number of economic stalwarts, including Intel Corp and Alcoa Inc reported strong results. Among the missteps, Google Inc's adjusted earnings missed expectations for the first time in two years. The stock was down 4 percent to $474.49 before the bell.
S&P 500 futures fell 4 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 fell 48 points, and Nasdaq 100 futures added 0.5 points.
In what could be a boost for the financial sector, Goldman Sachs Group Inc climbed 4.2 percent to $151.35 after it settled a U.S. civil case with the Securities and Exchange Commission.
The preliminary Thomson Reuters/University of Michigan Surveys of Consumers will be released at 9:55 a.m. EDT. It is expected to show sentiment edged slightly lower to 74.5 in July from June's reading of 76.
U.S.-listed shares of BP Plc slid 1.1 percent to $38.45 before the bell even as it said it had halted the spew of oil into the Gulf of Mexico, at least temporarily.
Stress tests on European banks should not reveal any catastrophes but the reviews should be tough, the chairman of euro zone finance ministers was quoted as saying.
The U.S. Congress approved the broadest overhaul of financial rules since the Great Depression on Thursday and sent it to U.S. President Barack Obama to sign into law.
European stocks were flat on Friday as the U.S. earnings offset strength in BP's London-listed shares. Japan's Nikkei average <.N225> ended down nearly 3 percent as investors worried the yen could rise further toward 15-year highs against the dollar.
U.S. stocks were lower for most of Thursday's session, though they later rebounded after the Goldman settlement and BP's success with its well.
(Additional reporting by Maria Aspan; editing by Jeffrey Benkoe)