MW: U.S. stock futures back into red as bank earnings weigh
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- U.S. stock futures fell into negative territory Friday, as relief over Goldman Sachs liabilities was met by disappointing bank-sector earnings from giants Citigroup and Bank of America as well as concerns over the profit growth at Internet bellwether Google.
Reversing a mild advance, S&P 500 futures fell 1.4 points to 1,089.00 and Nasdaq 100 futures slipped a half point to 1,848.70. Futures on the Dow Jones Industrial Average fell 24 points.
Markets moved into the red as bank results weren't warmly greeted. Bank of America (BAC 14.74, -0.65, -4.22%) and Citigroup (C 4.09, -0.07, -1.68%) each topped earnings estimates but revenue disappointed. Bank of America fell 4% and Citi slipped 1.7%.
Major U.S. stock indexes finished Thursday with little movement, as a raft of sour economic data as well as mixed interpretations of J.P. Morgan Chase's earnings were met by reports -- proved accurate after the markets closed -- that Goldman Sachs settled allegations of fraud brought by the Securities and Exchange Commission. BP also jumped after stemming the oil flowing from the Gulf of Mexico, though the oil giant still hasn't permanently sealed the well.
Goldman (GS 151.15, +5.93, +4.08%) agreed to pay $550 million to settle the suit, prompting Bank of America Merrill Lynch analysts to upgrade its rival to buy. The broker also lifted its price target for the stock to $182 from $160, saying the probability of other significant legal issues arising from the mortgage debacle is very low. "Specifically, we believe that the settlement of this case significantly reduces the probability of any criminal charges by the Department of Justice," the broker said.
Goldman Sachs rose nearly 5% in early premarket trade.
But Google (GOOG 473.70, -20.32, -4.11%) fell 4% as the online search giant reported a smaller-than-forecast 24% rise in second-quarter profit.
General Electric (GE 15.09, -0.16, -1.05%) shares wavered between gains and losses in premarket action. GE reported a 16% profit rise as its finance arm recovered.
The economic calendar features June consumer prices and May Treasury inflows, and shortly after the open, the University of Michigan's preliminary consumer confidence gauge for July.
The euro (CUR_EURUSD 1.2998, +0.0070, +0.5415%) hit a two-month high against the dollar, reaching $1.30, and the Japanese yen also rose.
Asian equities were hit hard, with the Nikkei 225 slammed 2.9% in Tokyo.
