U.S. stock futures fell Friday morning, indicating continued weakness in the stock market. Dell's worse-than-expected earnings reported late Thursday are putting pressure on equities as a whole and technology shares in particular. Investors may be moving toward safer securities in the absence of confidence in the strength of the sector, which has already stumbled the last couple of days.On Thursday, stocks fell across the board: the Dow industrials were down 0.9%, the S&P 500 declined 1.3% and the Nasdaq composite skidded 1.7%, following an analyst downgrade of semiconductors. This put further pressure on a sector that was already reeling from earnings the day before. Economic reports didn't help to increase investors' confidence Thursday.
There are no major economic indicators due out for release today, so the market will also likely continue to focus on the dollar-commodity relationship. The dollar index rose and several commodities, including copper, returned some of their gains. Meanwhile, Treasurys resumed a rally that's run for nearly two weeks as investors rush in to the safety and buy bonds. Two-year note yields were down to the lowest level seen in 10 months. Bond prices move inversely to their yields.
Pimco's Gross, Societe Generale and others have recently recommended a move into safer instruments, saying there's an inherent risk in the market as the debt burden could cause another dip. President Obama seems to agree with that last part.
Among stocks in news this morning is Dell (DELL), which said Thursday that its net income dropped 54% in the latest quarter and missed Wall Street's forecasts. Shares fell almost 6% in pre-market trading.
Overseas, Asian markets declined. European shares erased their earlier gains after oil prices fell toward $77 a barrel and after European Central Bank President Jean-Claude Trichet said the ECB will gradually withdraw emergency cash. Banks and energy stocks slipped.
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