Stock futures lower before data, GM shares fall

NEW YORK (Reuters) - Stock index futures fell on Friday, with the Dow headed for its worst month in more than two decades, as investors braced for economic data and news that the General Motors-Chrysler merger is on hold.

In Asia and Europe shares headed for their worst month ever as Japan's interest rate cut failed to erase concerns about the deteriorating global economic outlook and its impact on profits.

GM's shares fell 7.6 percent in European trading after three people with direct knowledge of talks told Reuters a deal to merge the U.S. automaker and Chrysler LLC hit an impasse after the Bush administration ruled out funding for it.

Technology shares could be under pressure after Intel Corp said in a regulatory filing that the recent financial crisis could have a negative impact on its chipmaking business, results of operations and financial condition.

Economic reports on tap include consumer sentiment data, personal income and spending and Chicago-area manufacturing data.

But Friday's weakness follows a week that is set to end higher, noted Arthur Hogan, chief market analyst at Jefferies & Co. "Asian markets are lower and Friday's have been difficult in the past weeks," said Hogan. "The data coming out today will likely be weak, but we've heard from the Federal Reserve this week -- they already warned us that it would be."

S&P 500 futures fell 18.20 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 slipped 151 points, and Nasdaq 100 futures dropped 30.25 points.

Video game publisher Electronic Arts added to jitters about the corporate earnings picture after it slashed its full-year profit forecast due to slowing demand at retail stores, driving its stock down 14 percent after hours on Thursday.

Google Inc and Yahoo Inc will also be in the spotlight after The Wall Street Journal reported they could announce a decision to walk away from their search deal by the middle of next week. The Journal cited people familiar with the matter.

Investors were awaiting earnings from energy company Chevron Corp , due at 8:30 a.m. (1230 GMT), as well as from Weyerhaeuser Co .

Chevron's shares were up 3.8 percent in European trading ahead of results.

Federal Reserve Chairman Ben Bernanke is due to speak on mortgage finance before the Symposium on the Mortgage Meltdown, the Economy and Public Policy at the University of California at Berkeley.

(Editing by Kenneth Barry)

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