Stock futures slip as Bank of America, GE beat earns estimates, but show some weakness

Stock futures slip after latest earnings

NEW YORK — Stock futures are slightly lower Friday as investors receive more mixed signals on the economy from earnings reports.

Bank of America Corp. and Citigroup Inc. became the latest banks to report big second-quarter profits on Friday, but showed continued weakness in loan portfolios. General Electric Co. beat earnings forecasts but revenue came up short.

Investors have been keenly focused on earnings reports this week, hoping to find more concrete signs of life in the economy and for validation that a huge rally in stocks this spring was justified.

Strong earnings from four of the largest U.S. banks have been encouraging, but there is still evidence that the recession’s grip on companies hasn’t eased as much as hoped.

BofA, which has struggled more than some of its peers from loan losses, beat Wall Street’s estimates just as Goldman Sachs Group Inc. and JPMorgan Chase & Co. did earlier this week. However its losses from delinquent loans continued to climb.

Citigroup, another troubled bank, surprised Wall Street with a $3 billion profit instead of the big loss analysts had expected, but results were boosted by the sale of a majority stake in its Smith Barney brokerage.

GE’s earnings fell 49 percent on losses at its financial unit and ongoing weakness in its industrial businesses but still topped forecasts. Revenue of $39.1 billion came in $3 billion below forecasts. Those reports followed mixed results from tech giants Google Inc. and IBM Corp. late Thursday.

Ahead of the opening bell, Dow Jones industrial average futures fell 21, or 0.2 percent, to 8,648. Standard & Poor’s 500 index futures fell 3.40, or 0.4 percent, at 932.30, while Nasdaq 100 index futures inched up 0.25, or 0.02 percent, to 1,513.

Bank of America shares slipped 22 cents to $12.95 in premarket trading, while Citigroup gained 10 cents to $3.13. GE shares fell 45 cents to $11.95.

Aside from the onslaught of earnings reports, investors got an upbeat reading on the housing market.

The Commerce Department said construction of new homes and apartments jumped 3.6 percent in June to 582,000, the highest level in seven months and better than the 530,000 economists expected. It was the second straight increase after a record low in April.

Building permits, an indicator of future construction activity, climbed 8.7 percent to an annual rate of 563,000, well above the 520,000 forecast by analysts.

The slight dip in futures comes after four straight days of gains in the Dow and the S&P 500. Stocks rallied Thursday after strong earnings from JPMorgan Chase and as investors pushed into technology stocks ahead of IBM and Google’s results. The tech-heavy Nasdaq advanced for the seventh straight day, rising 1.2 percent, and closed at its highest level since October. The Dow jumped 1.1 percent.

After the market closed on Thursday, Google said its second-quarter profit was its biggest since it went public five years ago. However, investors were concerned that revenue growth continued to decelerate. It was Google’s second straight quarter of single-digit revenue growth.

IBM, meanwhile, reported revenue below expectations, but its profit continued to improve. The computer and technology firm’s second-quarter results were strong enough that it increased its full-year earnings forecast.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.63 percent from 3.58 percent late Thursday. The yield on the three-month T-bill was unchanged at 0.16 percent.

Oil prices fell 50 cents to $61.52 in electronic trading on the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold prices fell.

Overseas, Japan’s Nikkei stock average rose 0.6 percent. In afternoon trading, Britain’s FTSE 100 gained 0.5 percent, Germany’s DAX index rose 0.4 percent, and France’s CAC-40 gained 0.7 percent.