(Adds GDP data)
* Facebook, Starbucks tumble in premarket after results
* GDP data in line with forecast
* Merck shares rise after earnings
* Futures up: Dow 29 pts, S&P 4.7 pts, Nasdaq 13
By Edward Krudy
NEW YORK, July 27 Wall Street was poised to rise
at the open on Friday, following a report on U.S. economic
growth which met expectations, and on renewed hopes for further
stimulus from the Federal Reserve and the European Central Bank.
U.S. economic growth slowed as expected in the second
quarter as consumers spent at their most sluggish pace in a
year. The figure was better than investors' worse fears but
still weak enough to potentially push the Federal Reserve closer
to pumping more money into the economy.
"The Fed's concern and mandate is employment. Annualized GDP
growth at 1.5 percent cannot begin to mend the unemployment
picture," said Joseph Trevisani, chief market strategist at
Worldwide markets in Woodcliff Lake, New Jersey. "Mr. Bernanke
and company have all the rationale they need to open the
Stocks leapt nearly 2 percent on Thursday, erasing much of
their losses for the week, as ECB chief Mario Draghi said he
would do whatever it takes to save the euro. That followed a
story in the Wall Street Journal Wednesday which was widely seen
as heralding a new round of stimulus from the Fed.
S&P 500 futures rose 4.7 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration of the
contract. Dow Jones industrial average futures added 29
points, and Nasdaq 100 futures gained 13 points.
Optimism over further stimulus measures have helped offset a
mixed U.S. corporate earnings season, with many companies
beating profit forecasts but often missing revenue projections
and warning about sluggish global growth.
As of Thursday, about half of S&P 500 companies have
reported earnings. Of those, about two thirds have beat profit
forecasts. Three in five, however, have missed Wall Street's
revenue projections, according to Thomson Reuters data.
Both Facebook and Starbucks tumbled in brisk premarket trade
after their earnings reports disappointed investors.
Facebook Inc reported a drastic slowdown in revenue
growth on Thursday and failed to offer financial forecasts that
quelled fears about its ability to boost advertising growth,
sending its shares plummeting to a record low. The stock was
down 14.2 percent at $23.04 in premarket trade.
Starbucks Corp cut its outlook for the current
quarter, citing global economic weakness and a recent slowdown
in visits in the United States, its biggest market for sales and
profits, sending shares tumbling 10 percent premarket.
Merck & Co reported better-than-expected quarterly
earnings on Friday, despite the negative impact of the stronger
dollar, with strong sales growth of its vaccines and treatments
for diabetes and HIV. The shares rose 1.9 percent in premarket
(Reporting by Edward Krudy; Editing by Bernadette Baum)