Futures drop after GE results, but gain on week

NEW YORK (Reuters) - Stock index futures fell on Friday as investors took profit after three days of gains, and as GE's results spotlighted the impact of slowing European growth on multinational companies.

General Electric Co reported earnings that beat expectations by a penny, though revenue was below expectations on weakness in Europe. Shares fell 0.7 percent in premarket trading.

"GE's European business was soft, and that's a concern for a lot of companies this earnings season," said Cort Gwon, chief strategist at HudsonView Capital Management in New York. "How will austerity in Europe impact multinationals? GE is a microcosm for the concerns we've having about the global economy."

In another sign of trouble abroad, Spain said it sees its economy contracting by 0.5 percent in 2013, with unemployment above 23 percent through 2014.

Earnings have lifted Wall Street in recent days, with technology and bank shares helping to drive the S&P to a 2-1/2 month high. Still, weak economic data, including on manufacturing and employment, served as reminders of the headwinds still facing markets, prompting some investors to lock in recent gains.

Of the 19 percent of S&P 500 companies reporting earnings so far, 65 percent have beaten expectations, slightly better than the yearly average since 1994, according to Thomson Reuters data.

A pair of major tech companies reported late Thursday, and both rallied on the results.

Microsoft Corp reported adjusted earnings and revenue that beat expectations, while Google Inc's revenue surged 21 percent, easing worries a sluggish global economy would take a toll on the company's online advertising.

On a net basis, Microsoft posted its first-ever net quarterly loss as a public company because of a previously announced write-down on the value of an ailing unit. Still, shares rose 1.8 percent to $31.22 in premarket trading. Google added 2.7 percent in light volume.

S&P 500 futures fell 8.3 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 lost 55 points and Nasdaq 100 futures sank 5.25 points.

For the week, the Dow is up 1.3 percent, the S&P is up 1.5 percent and the tech-heavy Nasdaq is up 2 percent. The S&P is at its highest level since early May. Some investors are pointing to a trading range between recent highs above 1,400 and a low in June around 1,280.

"We've had a nice run in the beginning of earnings season and people are taking some profits now," Gwon said.

In other earnings news, Schlumberger Ltd climbed 1.9 percent to $69.93 as revenue rose more than expected on international growth. Xerox Corp fell 5.4 percent to $6.80 after cutting its full-year profit forecast.

U.S. stocks rose on Thursday as results and forecasts from IBM , eBay and Qualcomm lifted technology shares. In addition, while weak data limited gains, it added to expectations that the Federal Reserve would soon step up stimulus efforts.

(Editing by Bernadette Baum)

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