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US STOCKS-Wall St to dip at open, Microsoft, AmEx weigh

Published 07/24/2009, 09:23 AM
Updated 07/24/2009, 09:32 AM
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* Schlumberger earnings drop, but beat estimates

* Microsoft, Amazon results disappoint late Thursday

* For up-to-the-minute market news click STXNEWS/US (Recasts, changes quote)

By Rodrigo Campos

NEW YORK, July 24 (Reuters) - U.S. stock index futures pointed to a lower open on Friday as disappointing results from Microsoft Corp and American Express Co curbed sentiment a day after a rally took the Dow industrials above the key 9,000 mark.

The nominal value of S&P futures seesawed, but fair value consistently edged lower, indicating a lack of conviction in the market's direction.

Futures recovered after a steep drop late Thursday, following results from Microsoft, American Express and Amazon.com Inc that failed to impress investors.

Lower profit from American Express and a third straight quarterly loss from Capital One Financial Corp pointed to weak consumer spending, according to Alan Lancz, president of an investment advisory firm in Toledo, Ohio.

"The consumer is on the sidelines and discretionary income is being saved, not spent," he said.

American Express and Capital One said rising customer delinquencies reduced second-quarter earnings, and shares of both credit card issuers fell before the opening bell.

S&P 500 futures fell 1.6 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. Nasdaq 100 futures shed 4.5 points.

The S&P 500 closed Thursday at its highest since the Election Day last November. The Nasdaq has risen for 12 straight days, its longest run since 1992.

After Thursday's closing bell, Microsoft posted a steeper-than-expected 17 percent drop in quarterly revenue. Its shares tumbled 7 percent to $23.75 in premarket trade.

Amazon.com fell more than 6 percent before the opening bell after the Internet retailer reported on Thursday revenues that missed analyst estimates.

Winding down a week loaded with quarterly reports from bellwethers in many sectors of the economy, Schlumberger Ltd shares rose 1 percent after the world's largest oilfield services provider reported a 57 percent drop in quarterly earnings, but beat expectations.

Economic data on tap includes the Reuters/University of Michigan consumer sentiment index for July due at 9:55 a.m. (1355 GMT).

Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair are among those testifying before the House Financial Services Committee hearing on regulatory reform in Washington at 10:30 a.m. (1430 GMT).

Separately, Geithner told the French newspaper Le Monde in an interview Friday that he is more optimistic on the economic outlook than he was three months ago.

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