US STOCKS-Wall St set to open flat after tech sector disappoints
* Microsoft, Google tumble after results miss
* GE rises 2.4 pct after results
* Investors may take profit after record highs on Dow, S&P
* Futures down: S&P 1.9 pts, Dow 11 pts, Nasdaq 2 pts
By Leah Schnurr
NEW YORK, July 19 (Reuters) - Wall Street was set to open little changed on Friday, in the wake of disappointing results from tech giants Microsoft and Google, suggesting investors may pause after recent gains that took the Dow and S&P 500 to closing highs on Thursday.
News out of China helped set a slightly firmer tone after the country's central bank announced long-awaited interest rate reforms, removing controls on the rates banks may charge clients for loans. S&P 500 futures briefly inched up and European shares cut declines after the announcement.
Shares of Microsoft and Google were lower in premarket trading after the results of both, announced after the close of trading Thursday, fell short of expectations. Microsoft was down 8 percent, while Google tumbled 2.9 percent.
"It's the first time in this cycle that we've had some household names that have missed and I think that's important, especially on a day where we're starting to transition our entire focus over to earnings," said Art Hogan, managing director at Lazard Capital Markets in New York.
Also in the tech sector, Advanced Micro Devices slumped 11.6 percent after the company said gross margins would fall, even as the chip maker forecast stronger-than-expected revenue growth in the third quarter.
Still, encouraging earnings reports from other companies may keep a floor under the market.
General Electric and Schlumberger both reported better-than-expected results, sending their shares higher. GE rose 2.4 percent, while Schlumberger was up 3.5 percent.
S&P 500 futures slipped 1.9 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 11 points, and Nasdaq 100 futures were off 2 points.
Analysts expect S&P 500 companies' second-quarter earnings to have grown 3.5 percent from a year earlier, with revenue up 1.1 percent, according to Thomson Reuters data.
So far, 70.4 percent of companies that have reported results have surpassed analysts' earnings expectations, while 49.4 percent have beaten revenue estimates.
In the absence of fresh economic data, the high-profile earnings disappointments may prompt investors to lock in profits, with the Dow and S&P sitting at record closing highs. The benchmark S&P is up more than 18 percent for the year.
Among other companies to report, Whirlpool climbed 2.4 percent after raising its full-year outlook.
Intuitive Surgical slid more than 12 percent after the company cut its 2013 sales forecast and said U.S. regulators had issued a warning after an inspection of its facilities.
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