LONDON (MarketWatch) - The volatile action in U.S. stocks looked set to continue Friday, with stock futures falling ahead of another round of likely gloomy economic data and as video games maker Electronic Arts cut its profit forecast.
S&P 500 futures fell 17.7 points to 943.80 and Nasdaq 100 futures dropped 28 poitns to 1,316.70. Dow industrial futures fell 137 points.
U.S. stocks closed with strong gains Thursday as investors shrugged off a report of weak economic performance during the third quarter amid indications of a further thaw in credit markets. The Dow Jones Industrial Average rose 189 points, the S&P 500 rose 24 points and the Nasdaq Composite added 41 points.
But over the course of the month, the S&P 500 has dropped 18%, the worst month since 1987.
On the economics calendar, personal income and the PCE core deflator for September, the Chicago manufacturing PMI for October and the University of Michigan's consumer confidence for October will be released.
"There is no reason to expect positive surprises on the final University of Michigan consumer sentiment survey or on the Chicago manufacturing PMI," said Lena Komileva, head of G7 market economics at Tullett Prebon.
Federal Reserve Chairman Ben Bernanke will be speaking on mortgage finance. San Francisco Fed President Janet Yellen, who doesn't vote on rate decisions this year, said U.S. rates could go "a little lower."
Overseas, the Bank of Japan defied expectations a bit, cutting rates to 0.3% from 0.5%, rather than the 25 basis point cut than many expected. The Nikkei 225 dropped 5% in Tokyo.
In London, a profit warning from telecoms group BT Group sent the U.K. firm down around 20% and dragged the FTSE 100 down 1.7%.
The dollar dropped vs. the Japanese yen, down 0.8% to 97.78 yen. Metals futures dropped, notably copper which fell almost 7% in electronic trade.
Oil futures fell $2.45 to $63.50 a barrel.
Video games maker Electronics Arts tumbled 14% in Frankfurt after it posted a wider loss and reduced its annual forecast.
"Sizeable increases in product development expenses cycle-to-cycle have not been offset by relative increases in unit/title productivity," said Deutsche Bank analysts, which reiterated a sell rating and cut its price target to $19 from $26.
"EA's (as well as all companies in the sector) strategy should be to focus on narrow/consolidated product line-ups in order to overcome development cost hurdles. These structural issues are now being met by a very significant slowdown in consumer spending likely this upcoming holiday season and continuing through 2009," the brokerage said.
Also after hours, Sun Micro reported a $1.68 billion quarterly loss.
The automotive sector will be in the spotlight as a deal to merge General Motors with Chrysler has hit an impasse after the Bush administration ruled out funding for it, according to a Reuters report.
Yahoo may be in the spotlight as The Wall Street Journal reported that a planned Web advertising partnership with Google may fall apart next week amid objections from the Justice Department.
Meanwhile, the Justice Department said Thursday it's suing to block Verizon Communications Inc.'s proposed, $28 billion acquisition of Alltel Corp. unless Verizon agrees to divest assets in 22 states.
