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Stock futures edge lower after rally, Citi up early

By Ryan Vlastelica

NEW YORK (Reuters) - U.S. stock index futures fell on Monday, coming off a steep rally in Friday's session as investors looked to corporate earnings for clues into an economy that is slowing.

Citigroup Inc reported adjusted second-quarter earnings that beat expectations, sending shares up 1.9 percent to $27.16 in premarket trading. The results follow JPMorgan Chase & Co's on Friday, which contributed to gains of 1 percent on major indexes.

While early reads on earnings from companies like Alcoa Inc have come in above expectations, many investors remain concerned about the impact that slowing growth and Europe's debt crisis will have on outlooks.

Many companies, especially in the tech space, have warned on profits in recent weeks. Negative to positive earnings guidance for the second quarter is 3.3 to 1, the worst since 2008, Thomson Reuters data showed.

"Citigroup is just one company; the fact that there are still concerns about lower economic growth globally is what's keeping us in lower territory now," said Jay Feuerstein, chief executive officer of the Chicago-based 2100 Xenon Group, an alternative asset manager.

Data on U.S. June retail sales will be released at 8:30 a.m. (1230 GMT) and will be scoured for any impact of global weakness on consumer spending. Sales are seen rising 0.2 percent. The New York Federal Reserve releases its July Empire State Manufacturing Survey also at 8:30 and economists expect the main index to read 4.00, compared with 2.29 in June.

"Consumer spending is the quickest way for us to get to growth, and consumers appear to be weakening because of unemployment and a slowing growth rate," Feuerstein said.

S&P 500 futures fell 4.4 points and were below 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 fell 30 points and Nasdaq 100 futures lost 7 points.

The impact of global economic issues will remain a focus in a busy week for earnings. In addition to Citigroup, Goldman Sachs , Intel Corp , Johnson & Johnson and Coca-Cola Co are on tap to report this week.

U.S. Federal Reserve Chairman Ben Bernanke will also likely drive markets this week as he delivers his semiannual monetary policy report to Senate and House of Representatives committees on Tuesday and Wednesday. Analysts said he is not likely to divulge plans of further economic stimulus.

In company news, Human Genome Sciences Inc rose 3.3 percent to $14.03 in premarket trading after sources said GlaxoSmithKline is expected to announce a deal to buy the company for about $2.8 billion, ending a three-month hostile pursuit of the U.S. biotech company on friendly terms after sweetening its offer.

Comcast Corp , the parent company of NBC, has bought out Microsoft Corp's 50 percent stake in MSNBC.com for a reported $300 million to assume full control of the news website.

Ford Motor Co is recalling some of its 2013 Escape compact sport-utility vehicles because a carpeting flaw may cause drivers to apply the brakes improperly, increasing stopping distances and the risk of crashes.

U.S. shares rose more than 1 percent on Friday, snapping a six-day losing streak. In addition to results from JPMorgan, investors were cheered by Chinese growth data that eased concerns about a slowdown.

(Editing by Chizu Nomiyama, Dave Zimmerman)

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