April rout turns rally, stock futures higher

NEW YORK (Reuters) - Stocks were on track for a fourth day of gains on Friday, with Amazon the latest company to extend an earnings-driven rally that has erased most of April's losses and left investors eyeing a return to a new recovery high.

Amazon.com Inc's profit and sales beat expectation as North America Media revenue, which includes books, DVDs and music, rose 17 percent The stock jumped 14.5 percent to $224.48 in premarket trade.

With 254 companies in the S&P 500 reporting, more than 72 percent have topped estimates, according to Thomson Reuters data as of Thursday. A big beat from Apple Inc drove Wednesday's rally, which gave the Nasdaq its best day of the year.

"By and large, earnings season has been positive and has proven to be an offset to the euro debt situation and to the mixed economic numbers of late," said Andre Bakhos, director of market analytics at Lek Securities in New York

"With the (S&P 500) above 1,400 yesterday and closing just below it completes a bottoming consolidation formation and now the stage is set for a move high."

In a potential wild card for markets, the first estimate of first-quarter gross domestic product is expected to show the economy expanded at a 2.5 percent annual rate, a Reuters poll found, versus 3.0 percent in the fourth quarter. Investors have become cautious after signs of a softening recovery.

S&P 500 futures rose 3.7 percent 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 22 points, and Nasdaq 100 futures climbed 10.75 points.

The S&P 500 is on track for its best week in a month, rising 1.6 percent so far this week and up for three straight days. The move has wiped out much of the index's losses for April and lifted the index well above its 50-day moving average.

European shares inched higher early Friday, helped by encouraging company earnings. The FTSEurofirst 300 index <.FTEU3> of top European shares was up 0.6 percent. <.EU>

Still, Institutional investors pulled back from equity funds in the week to April 25, resulting in a modest net outflow for the sector overall, according to Thomson Reuters' Lipper data.

In other earnings news, Procter & Gamble Co lowered its profit expectations for the year and posted lower earnings. The shares fell 2 percent to $65.55.

Merck & Co Inc's income came in slightly above Wall Street estimates, but revenue trailed the Wall Street view on generic competition and reduced revenue from alliances with other drugmakers.

Ford Motor Co reported lower profit, hurt by weak international results, particularly in Europe, and a higher tax rate. But the shares rose 2.1 percent to $12.12 in premarket trade as operating profit beat expectations.

Gilead Sciences Inc earnings fell short of estimates as sales of its flagship HIV drugs rose nearly 20 percent but expenses also moved higher.

Starbucks Corp reported better-than-expected quarterly profit but global sales missed estimates due to weakness in Europe. It shares fell 4.4 percent to $58.

Online travel agency Expedia Inc topped estimates for profit growth as worldwide hotel revenue increased. Its shares gained 20.3 percent to $39.26.

(Reporting by Ed Krudy; editing by Jeffrey Benkoe)

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