* Microsoft up in premarket after earnings
* S&P on track for second straight weekly decline
* Futures off: Dow 99 pts, S&P 12 pts, Nasdaq 19.75 pts
By Chuck Mikolajczak
NEW YORK, Jan 24 U.S. stocks were set for a
lower open on Friday, in the wake of a selloff in emerging
market assets, as expectations grew that the Federal Reserve
will trim its market-friendly stimulus measures further next
With many market participants expecting the Fed to shave its
stimulus by another $10 billion a month next week, investors
will look to less risky assets such as U.S. bonds, expecting
interest rates will begin to rise. The Fed's
policymakers will conclude a two-day meeting on Wednesday.
A rout in emerging market assets spread to developed
countries in Europe on worries over Fed policy, slowing growth
in China and political problems in Turkey, Argentina and
The Turkish lira hit a fresh record low and the
South African rand hit a new five-year low against the
dollar. U.S.-listed shares of Banco Bilbao Vizcaya Argentaria,
S.A. fell 3 percent to $12.30 in premarket trading a
day after the country's peso currency suffered its steepest
daily decline in 12 years.
"If rates start to go higher, money will come back into the
bond market because people have guaranteed rates and it will
come out of the stock market," said Ken Polcari, Director of the
NYSE floor division at O'Neil Securities in New York.
"Especially if people think if the Fed pulls out and rates
go higher and the economy starts to stumble, stocks are going to
get beat, up but they will have some safety in interest rate-
sensitive stocks and bonds."
The 10-year U.S. Treasury yield rose above 2.75
percent after earlier falling to a two-month low.
Argentina's government said Friday it would loosen strict
foreign exchange controls, after it abandoned its long-standing
policy of supporting the peso currency by intervening in the
foreign exchange market earlier this week. That resulted in the
currency's steepest plunge since the 2002 financial crisis.
The S&P 500 is down 0.6 percent for the week, on pace for
back-to-back weekly losses for the first time since September.
Nine companies in the S&P 500 are scheduled to report
earnings on Friday.
Procter & Gamble Co gained 0.5 percent to $78.60 in
premarket after the world's largest household products maker,
reported lower quarterly profit on Friday but kept its 2014
sales forecast unchanged.
Microsoft Corp gained 3.2 percent to $37.20 before
the opening bell after the world's largest software company
posted a bigger-than-expected quarterly profit.
S&P 500 e-mini futures fell 12 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 dropped 99
points and Nasdaq 100 futures lost 19.75 points.
Honeywell International Inc reported
higher-than-expected fourth-quarter profit and revenue on
Friday, as sales grew across the diversified manufacturer's
major segments. However, its shares slipped 0.2 percent to
$89.60 in premarket.
Thomson Reuters data through Thursday morning shows earnings
for the fourth quarter are expected to grow 7 percent. Of the
102 companies in the benchmark S&P index that have reported, 63
percent beat expectations, in line with the long-term average.