Stock futures signal weaker Wall St after Fed

(Reuters) - U.S. stock index futures fell, pointing to a weaker start for Wall Street on Friday after the U.S. Federal Reserve raised an emergency lending rate it charges banks.

By 0904 GMT (4:04 a.m. EST), futures for Dow Jones, S&P 500 and Nasdaq Composite dropped 0.5 to 0.7 percent.

Fed officials moved to calm speculation that a surprise rise in its discount rate could bring forward broader policy tightening, saying borrowing costs in the economy would stay low.

The Labor Department will release January consumer prices at 1330 GMT (8:30 a.m. EST). Economists in a Reuters survey expect a 0.3 percent increase compared with a 0.2 percent rise the prior month. Excluding volatile food and energy items, CPI is seen up 0.1 percent, a repeat of the December reading.

Among companies reporting results on Friday are JCPenney, PG&E Corp and Pinnacle West Capital Corp.

Dell Inc's quarterly gross margin missed Wall Street expectations, hurt by sales of lower-priced personal computers for consumers and a rise in costs for memory chips and other components.

The world's No.3 PC seller expects to log solid double-digit growth in China this year, following a near doubling of sales in its latest quarter fueled by government stimulus measures. Dell shares in Frankfurt lost 4.9 percent.

U.S. oilfield services leader Schlumberger Ltd is in advanced talks to buy smaller rival Smith International Inc , the Wall Street Journal said, citing people familiar with the negotiations.

Efforts to tighten U.S. financial regulations advanced on Thursday, with a new bipartisan bill expected next week from two key senators who were working on it while traveling together in Panama.

Former Bank of America Chief Executive Kenneth Lewis said he was briefed twice on his company's decision not to disclose rising losses at Merrill Lynch & Co, before the bank's takeover of Merrill was put before shareholders.

The dollar leapt and the euro hit a nine-month low on Friday after the Fed move, which came after U.S. stock market close, while European and Asian shares fell, with the FTSEurofirst 300 <.FTEU3> down 0.3 percent and the Nikkei average <.N225> down 2.1 percent.

U.S. stocks rose for a third straight day on Thursday as investors viewed company results and manufacturing data as evidence the economic rebound will continue.

The Dow Jones industrial average <.DJI> rose 83.66 points, or 0.81 percent, to 10,392.90. The Standard & Poor's 500 Index <.SPX> added 7.24 points, or 0.66 percent, to 1,106.75. The Nasdaq Composite Index <.IXIC> gained 15.42 points, or 0.69 percent, to 2,241.71.

(Reporting by Dominic Lau; editing by Karen Foster)