US pre-open: Stock futures fall as earnings disappoint

US equities are expected to open lower on Friday as investors sift through disappointing corporate earnings and await a report on US manufacturing.

“It’s worth noting that we are still broadly higher on the week but still, there is a feeling that we needed a decent earnings season to justify equities at these elevated levels, particularly in the US where the Dow and S&P 500 are within touching distance of all-time highs,” said Craig Erlam, senior market analyst at Oanda.

“Even with the bar being set very low, US corporates have so far failed to impress, let alone blow us away.”

Shares in Google parent company Alphabet fell in pre-market trade after reporting first quarter profit that missed analysts’ expectations.

Microsoft was also under the cosh after the tech giant reported lower-than-expected revenues and earnings for its third quarter.

General Electric declined in pre-market trade after reporting a wider loss for the first quarter.

McDonald's is also scheduled to announce its first quarter earnings before the opening bell.

In economic data, Markit’s US manufacturing purchasing managers’ index is due at 1445 BST with analysts expecting an increase to 52.0 in April from 51.5 in March. A reading above 50 signals an expansion in sector activity while a level below that indicates a contraction.

Meanwhile, oil prices headed for a third straight week of gains as market sentiment improved.

At 1239 BST, West Texas Intermediate rose 0.41% to $43.37 per barrel and Brent crude gained 0.29% to $44.66 per barrel.

The dollar fell 0.44% against the pound, rose 0.17% versus the euro and increased 1.10% versus the yen.