Disappointing results from big players weighs in on US stock index futures

U.S. stock index futures plunged on Friday as disappointing results from behemoths Amazon and Alphabet rekindled a rush to dump technology and high-growth stocks, ahead of data that will likely show U.S. economic growth slowed last quarter.

The Nasdaq Composite was set to cut its gains for the year in half as Nasdaq 100 e-minis sank over 2 per cent. S&P 500 e-minis and Dow e-minis shed about 1 per cent each, which would be enough to push both the indexes back into losses for the year.

Amazon.com Inc tumbled 9.5 per cent in premarket trading after it not only missed quarterly sales estimates but also gave a below-par holiday-season sales forecast. Its cloud unit, Amazon Web Services, only narrowly beat estimates.

Google-parent Alphabet Inc sank 6.1 per cent after its revenue missed estimates, fanning concerns that investments in new businesses, rising regulatory scrutiny and competition are producing slow, unpredictable returns.

The reports triggered a pullback in other members of the so-called FAANG group. Facebook Inc fell 3.3 per cent, Apple Inc slid 2 per cent and Netflix Inc dropped 4.7 per cent.

A clutch of weak outlooks on Wednesday had led the Nasdaq to confirm a correction and erased the Dow and the S&P 500's gains for the year. On Thursday, Microsoft Corp's strong earnings led a rally that pulled the S&P and Dow back into the black for 2018.

"Risk aversion is alive and kicking on Friday, as weaker than expected tech earnings trigger the latest stampede and those still buying the dips once again get burned," Craig Erlam, a senior market analyst at online forex broker Oanda, said in a note.

"Earnings season has more to run, so there's plenty of time for companies to turn this funk around. But, as yet, they haven't given investors the boost they well and truly need."

While investors grapple with a slowdown in the bumper corporate profit growth, they are now also faced with a scenario of U.S. economic growth also taking a breather after months of strength.

U.S. GDP growth likely slowed to a 3.3 per cent annualized rate in the third quarter, from 4.2 per cent in the prior quarter, data at 8:30 a.m. ET (1230 GMT) is expected to show.

"Today's number could give signs if we are close to peak earnings for U.S. corporates. Housing data and consumer goods durables data has been soft lately," said Sim Moh Siong, currency strategist at Bank of Singapore.

At 6:56 a.m. ET, Dow e-minis was down 239 points, or 0.96 per cent. S&P 500 e-minis were down 33 points, or 1.23 per cent, and Nasdaq 100 e-minis was down 164.75 points, or 2.38 per cent.

Microsoft, whose strong results helped push the Nasdaq to its biggest daily gain since March just a day earlier, fell 4.7 per cent.

Intel Corp was up only 0.4 per cent as its better-than-expected quarterly results were clouded by interim Chief Executive Bob Swan saying trade tensions with China could be a "headwind" next year.

The pullback in U.S. corporate and economic growth has heightened investors worries that a decade-old bull market may be ending and triggered a whipsaw in the market for the past few weeks. Despite Thursday's pop, the S&P is down 7.2 per cent this month, on pace for its worst month in seven years.