Stock Futures Drop on GDP Report

NEW YORK (TheStreet) -- Stock futures fell Friday after data showed that the U.S. economy expanded less than expected in the fourth quarter.

Futures for the Dow Jones Industrial Average were dropping 32 points, or 28.6 points below fair value, at 12,652. Futures for the S&P 500 were falling 3.5 points, or 2.5 points below fair value, at 1311, and futures for the Nasdaq were down 1.5 points, or 0.6 points above fair value, at 2452.

The Bureau of Economic Analysis reported early Friday that the total output of goods and services in the U.S. expanded 2.8% quarter-over-quarter during the fourth quarter, which was less than the 3.1% expansion that economists polled by Thomson Reuters were expecting. In the third-quarter, gross domestic product increased 1.8%.

Stocks dropped Thursday as disappointing housing numbers and weak jobless data overshadowed strong earnings from a handful of corporate heavyweights.

Other economic data Friday includes the University of Michigan consumer sentiment index for January at 9:55 a.m. Economists expect the final reading to remain unchanged at 74.

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London's FTSE was slipping 0.14%, and Germany's DAX was up 0.30%. In Asia, Japan's Nikkei Average closed lower by 0.09%. Hong Kong's Hang Seng index finished higher by 0.31%.

In corporate news, Procter & Gamble(PG), the consumer products giant, reported profit for the fiscal second quarter of 57 cents a share and sales of $22.14 billion. Analysts expected it to post earnings of $1.08 a share on revenue of $22.19 billion. Earnings so not include one-time items, including a charge of 50 cents a share for costs related to the appliances and salon professional businesses. Earnings came in 49% below the quarter a year earlier when P&G earned $1.11 a share on revenue of $21.3 billion. Shares were slipping 0.2% to $64.69 before the bell Friday.

Automaker Ford(F) missed estimates but a one-time tax gain helped the company post the biggest profit since 1998 of $20.2 billion for the fourth quarter. Profit came in at 20 cents a share, excluding one-time costs. Analysts forecast 25 cents a share on revenue of $32.35 billion, according to analysts. Overseas businesses pressured profits although it was the third straight quarter that profits rose for Ford. The stock was losing 5.1% to $12.14 in premarket hours.

Honeywell International(HON) reported fourth quarter earnings of $1.05 a share, up 21% from the period a year earlier. Sales rose by 8% to $9.5 billion, with the help of new product launches and expansion in high growth regions. Consensus forecast was for $1.04 earnings per share on revenue of $9.56 billion. Honeywell shares were up 1.7% to $58.80.

Eastman Chemical(EMN) proposed to buy Solutia(SOA) in a deal worth $4.7 billion, including debt. The buyer will pay $27.65 a share for Solutia, which is a 42% to Solutia's closing price on Thursday of $19.51. Eastman shares were up 6.8% while Solutia was soaring by 40.7% to $27.50 in premarket trading.

Starbucks'(SBUX) outlook for fiscal 2012 came in short of the consensus view. The Seattle-based coffee seller said it expects earnings of $1.78 to $1.82 a share for the full year, slightly below analysts' expectations for profit of $1.83 a share. The company said it expects "unfavorable" commodity costs to impact results this year with the brunt of the impact coming in the first half of the year.

Juniper Networks(JNPR) reported worse-than-expected fourth-quarter earnings and issued weak first-quarter guidance. Juniper reported fourth-quarter earnings of 28 cents a share on revenue of $1.12 billion. Wall Street analysts expected Juniper to earn 28 cents on $1.126 billion in revenue.

First-quarter guidance was weaker than Wall Street analysts were anticipating, as customer spending continues to be sluggish. Juniper expects first-quarter revenue of between $960 million and $990 million and earnings of 11 cents to 14 cents a share. Wall Street analysts expected $1.1 billion in revenue and 26 cents in earnings, according to Yahoo! Finance.

Biotech company Amgen(AMGN) said fourth-quarter profit fell 8.5% as expenses for taxes and for producing and selling drugs rose faster than revenue. Amgen reported net income of $934 million, or $1.08 a share, down from $1.02 billion, or $1.08 a share, a year earlier. On an adjusted basis, Amgen said it earned $1.04 billion, or $1.21 a share; analysts were expecting adjusted propfit of $1.22 a share. Revenue rose 3% to $3.97 billion. Analysts expected revenue of $3.92 billion.

A federal judge on Thursday ruled that Transocean(RIG)is shielded from paying out certain claims against it stemming from the massive oil spill in the Gulf of Mexico in April 2010 because of its contract with BP(BP).

March oil futures were up 47 cents to $100.17 a barrel, while February gold futures were off $1.60 to $1,725.10 an ounce.

The benchmark 10-year Treasury was falling 5/32, raising yield to 1.954%, while the U.S. dollar index was falling 0.3% to $79.15.

-- Written by Andrea Tse in New York.

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