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Futures Fall Ahead of Spanish Bank Stress Test

U.S. stock index futures dropped Friday as investors locked in gains at the end of a strong quarter and amid uncertainty ahead of the result of stress tests on Spanish banks.

Spain remains in focus on Friday when an audit of Spanish banks will reveal their recapitalization needs. Investors will also turn their attention to France, where socialist leader Francois Hollande presents his first budget to the cabinet. Unemployment has hit record highs in the country and its economy is stagnant.

Moody’s is expected to publish a review of Spain’s credit rating and could downgrade its credit rating to junk status.

Stocks finished higher in the previous session, with the S&P 500 breaking a five-day losing streak, after Spain unveiled a plan for economic reform and amid optimism China's government would provide additional stimulus.

On the economic front, consumer spending rose in August by the most in six months, increasing 0.5 percent. The gain was in line with economists' expectations. When adjusted for inflation, consumer spending edged up 0.1 percent after increasing 0.4 percent in July.

And income edged up 0.1 percent but was eroded by the rise in inflation. The amount of income at the disposal of households after accounting for inflation and taxes fell 0.3 percent after ticking up 0.1 percent in July. That was the first decline since November.

The Institute of Supply Management Chicago's September manufacturing activity index will be released at 9:45 am ET and the final September reading of the Thomson Reuters-University of Michigan consumer sentiment index is due at 9:55 am ET. The ISM index is seen holding steady at 53 and the sentiment index is seen moving to 79 from 79.2 in the preliminary report.

Bank of America said it has settled a class action lawsuitwith investors who purchased or held Bank of America securities at the time the financial giant announced plans to buy Merrill Lynch.

Amazon.com announced it is planning an online marketplace for wine sales. Meanwhile, Facebook unveiled a new feature that would allow users to send "gifts" to their Facebook friends.

Research In Motion reported a smaller quarterly loss than expected on higher revenue.

Meanwhile, Apple’ s iPhone 5 rolls out to another 22 countries.

Nike topped earnings expectations, but shares declined as the sports-apparel company warned of slowing orders in China.

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

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FRIDAY: Chicago PMI, consumer sentiment

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