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Futures erase losses after housing starts report

U.S. stock index futures erased their early gains Friday following a better-than-expected housing starts report.

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Housing starts jumped 13.2 percent to a seasonally adjusted annual pace of 1.07 million units, according to the Commerce Department. The reading was the best since November 2013. And building permits hit their highest level since 2008.

Also on the economic front, the Thomson Reuters/University of Michigan index of consumer sentiment will be reported at 9:55 am ET.

Federal Reserve Bank of St. Louis President James Bullard is expected to speak on the economy and monetary policy in Arkansas at 11:50 am ET.

No major earnings are expected Friday.

JCPenney spiked nearly 20 percent after the retailer posted a smaller-than-expected quarterly loss and topped revenue expectations. At least six brokerages raised their price targets on JCPenney.

Nordstrom surged almost 10 percent after the department store chain beat earnings expectations and said it would seek a partner for its credit card receivables, currently totaling about $2 billion.

Darden Restaurants slipped after the restaurant chain agreed to sell its struggling Red Lobster chain to Golden Gate Capital for $2.1 billion in cash.

Verizon rose a day after Warren Buffett's Berkshire Hathaway unveiled a new stake of 11 million shares in the company in a regulatory filing. The filings also showed that prominent hedge fund managers cut their exposure to high-profile Internet names like Netflix in the quarter.

European shares failed to bounce back after Thursday's global selling, which was prompted by anxiety over slow growth, low inflation and hefty valuations. U.S. shares fell for a second session on the day, with the Dow Jones down triple digits. The S&P 500 lost 1 percent each while the Nasdaq closed down 0.8 percent. Small-cap stocks weighed on Thursday, as the Russell 2000 briefly hit correction territory before pulling back.

The Russell will continue to be in focus on Friday. While the index is currently 9.3 percent away from its early March record of 1,208.65 - less than the 10 percent decline that marks a correction - it has closed below its 200-day moving average in the past two session, a sign of weakening momentum.

The 10-year Treasury yield broke below the psychologically important 2.50 percent mark on Thursday for the first time since last October.


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