Wall Street to open steady after GDP beats expectations

NEW YORK (Reuters) - Stock index futures pointed to a steady open on Friday, after data showed the economy grew at a faster pace than expected, overshadowing recent concerns about a disappointing earnings season so far.

Futures sharply pared earlier losses and S&P futures briefly turned positive, after the Commerce Department said U.S. gross domestic product expanded at a 2.0 percent annual rate. That follows 1.3 percent growth in the second quarter, and was just a tick above the 1.9 percent estimate of analysts polled by Reuters.

Still, the positive data may not be enough to stem a recent slide in the market, which has seen the S&P drop 3.3 percent over the past six sessions, it's worst 6-day run in five months.

"Futures are coming back simply because this GDP number was above the consensus number," said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.

"The fact that this was a two percent GDP number is still pathetic in the overall scheme of life - we ought to be growing at four percent, not two percent."

Apple Inc , the world's largest company by market capitalization, reported a second straight quarter of disappointing results and iPad sales fell well short of analysts' targets. The company also forecast revenue and margins below Wall Street forecasts.

Amazon.com Inc after posting its first quarterly net loss in more than five years. It forecast fourth-quarter revenue that fell short of analysts' expectations.

Still, both companies erased early declines in premarket trading, with Apple up 0.08 percent at $610 and Amazon up 2.1 percent at $227.65.

The S&P 500 has dropped 1.4 percent this week as dismal corporate earnings and cautious outlooks, especially from large multinationals, painted a pessimistic picture of the global economy.

Adding to uncertainty was the impending U.S. presidential election on November 6, which, along with earnings and growth worries, helped drop the benchmark S&P index to below a key support level, the 50-day moving average, at around 1,434.

Many analysts expect the retreat to wane near 1,400 or 1,375, as the Federal Reserve's latest stimulus policy puts a floor under equity prices.

With 244 companies in the S&P 500 having reported, 62.3 percent have beaten earnings expectations, a tad better than the typical 62 percent average, Thomson Reuters data showed.

Revenue for the quarter has been more disappointing, with just 36.3 percent of companies reporting higher-than-expected revenue - compared with a historic beat rate of 62 percent.

S&P 500 futures fell 0.4 points and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 20 points, and Nasdaq 100 futures added 2.25 points.

Economic data expected later in the session includes the Thomson Reuters/University of Michigan Surveys of Consumers final October consumer sentiment index at 9:55 a.m. (1355 GMT). Economists in a Reuters survey expect a reading of 83.0 compared with 83.1 in the preliminary October report.

Goodyear Tire & Rubber Co slumped 3.7 percent to $11.85 in premarket trading after it said quarterly profit fell amid lower tire sales in all its key markets, and particularly in Europe.

Dow component Merck & Co Inc slipped 0.7 percent to $46 in premarket trading after the drugmaker reported better-than-expected third-quarter profit, though overall sales came in slightly below Wall Street expectations.

Newell Rubbermaid Inc reported a higher-than-expected quarterly profit and raised its quarterly dividend by 50 percent to 15 cents a share but also said it would cut about 2,000 jobs over the next 2 1/2 years as it attempts to combat slower sales. Its shares climbed 4.5 percent to $21 in premarket.

Arch Coal Inc surged 10.1 percent to $8.05 in premarket trading after surprising Wall Street with a third-quarter profit as cost cuts paid off, and the company said thermal coal shipments were improving.

(Editing by Bernadette Baum)