U.S. stock index futures edged down on Friday, as caution prevailed ahead of the release of U.S. non-farm payroll figures, with futures for the S&P 500, the Dow Jones and the Nasdaq down 0.1 to 0.2 percent by 4:42 a.m. ET.

* Economists expect U.S. non-farm payrolls, due at 8:30 a.m. ET, to show 175,000 new jobs created in December, the highest level since May, though the unemployment rate is seen edging down only slightly to 9.7 from 9.8 percent.

* Key jobs data report comes after 8 percent rise in the S&P 500 since the start of December.

* U.S. stocks slipped on Thursday, pressured by soft retail sales and a sharp rise in the dollar.

* Ben Bernanke delivers his first congressional testimony since the Federal Reserve launched a controversial bond-buying policy, and may put the brakes on some of Wall Street's optimism surrounding a recent rebound in key economic data.

* U.S. Republicans acknowledged on Thursday they will have to sign off on more deficit spending to avoid a debt default that could roil financial markets and bring the government to a grinding halt.

* In company news, Sara Lee Corp is considering the spin-off of its meat and coffee businesses after rejecting a takeover bid last month from Brazil's JBS SA , a source familiar with the situation said on Thursday.

* The Chinese securities regulator on Friday approved the local joint ventures of J.P. Morgan Chase & Co and Morgan Stanley , bringing the banks a step closer toward operating securities businesses in China that they, and other banks, have long sought.

* Citigroup is seeking buyers for CitiFinancial, the largest consumer finance company in the United States, in a deal that could raise hundreds of millions of dollars, the Financial Times said.

* The Pentagon has overhauled the Lockheed Martin Corp F-35 fighter project for the second time in a year and said it would buy 41 Boeing Co F/A-18 combat planes over the next three years to offset slower production of the Lockheed plane.

* The United States plans to cut $78 billion in defense spending over five years, including a reduction of up to 47,000 troops, in a politically contentious move that would trim the government's growing budget deficit.

* Three dry wells drilled by Murphy Oil Corp off the Republic of the Congo will cost it $36 million in the fourth quarter, the U.S. oil company said on Thursday.

* The board of bailed-out insurer American International Group approved a dividend for shareholders on Thursday that assumes its recapitalization plan will close as soon as next week.

* In Europe, the pan-European FTSEurofirst 300 <.FTEU3> index of top shares was down 0.3 percent in early trade, with investors cautious ahead of the widely-watched U.S. payrolls data.

(Reporting by Harpreet Bhal; Editing by Greg Mahlich)

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