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Futures Hold Gains After GDP Report; FB Skids

CNBC.com and Reuters
Friday, 27 Jul 2012 | 8:32 AM ET

U.S. stock index futures held modest gains Friday after the latest GDP report showed a slowing economy in the second quarter, fueling expectations for further action from the Federal Reserve.

Gross domestic product expanded at a 1.5 percent annual ratein the second quarter, according to the Commerce Department said on Friday. Still, the reading marked the weakest pace of growth since the third quarter of last year.

First-quarter growth was revised up to a 2.0 percent pace from the previously reported 1.9 percent.

"The recession and debt concerns in Europe, as well as the rapid slowdown in China, are having spillover effects here in the United States," said Todd Schoenberger, managing principal at The BlackBay Group. "Sadly, the only bullish action that may be able to reverse this trend, at least in the short-term, is further monetary easing by the Federal Reserve."

Also on the economic front, the Thomson Reuters/University of Michigan Survey of Consumers will be reported at 9:55 am ET. Economists expect a reading of 72.

Stocks surged sharply in the previous session, with the Dow jumping more than 200 points after European Central Bank President Mario Draghi’s vow to do “whatever it takes” to save the euro. (Read More: Did Draghi Just Give Investors an Exit Point?)

Among earnings, oil giant Chevron topped earnings expectations, but revenue was lighter than expected.

Merck reported better-than-expected quarterly earnings despite the negative impact of the stronger dollar, with solid sales growth from its vaccines and treatments for diabetes and HIV.

Lower Interest Rates Don't Make Sense: Fisher
Peter Fisher, BlackRock global head of fixed income, weighs in on why the Federal Reserve needs to rethink the slope of the interest rate curve.

Meanwhile, Facebook plunged to hit an all-time low after the social-networking giant posted a slowdown in revenue growth and gave no guidance, causing investors to worry over the future growth.

Starbucks fell after the coffeehouse giant missed earnings estimates and slashed its current-quarter outlook, citing global economic weakness. The company's disappointing news follows a string of other weak results chain restaurants including Chipotle and McDonald's in recent weeks.

—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)

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