Futures hold modest gains after economic reports

U.S. stock index futures held their modest gains Friday following the housing starts report and after major averages logged their biggest drop since June.

On the economic front, housing starts rose 5.9 percent to a seasonally adjusted annual rate of 896,000 units in July, according to the Commerce Department, which was less than the expected 900,000 unit rate expected by economists polled by Reuters. June's starts were revised up to show a 846,000-unit pace instead of the previously reported 836,000 units.

And nonfarm productivity rose in the second quarter at a 0.9 percent annual rate as output increased more than hours worked, according to the Labor Department. Economists polled by Reuters had expected productivity to gain at a 0.6 percent rate.

In addition, the University of Michigan's consumer sentiment survey will be released at 9:55 am ET. Economists surveyed by Reuters expect a reading of 85.5 compared with 85.1 in the final July report.

Global miner BHP Billiton fell on anti-corruption enforcement action in the U.S.

(Watch now: Why BHP is still the top mining pick)

Among earnings, Dell topped earnings expectations, but profits were 72 percent below year-ago levels amid falling PC sales and the company's ongoing buyout battle.

Applied Materials edged lower after the semiconductor company missed quarterly expectations forecast current-quarter earnings below analyst estimates. Separately, the company appointed president Gary Dickerson as its new CEO.

Nordstrom edged past earnings expectations but cut full-year earnings and revenue outlook amid sliding same-store sales, sending shares lower.

In Asia, China's benchmark index pared gains on Friday after a sudden burst of buying that saw the index spike 5.6 percent on stimulus rumors and futures expiration. The rest of Asia was broadly lower in response to Shanghai's volatile trade and Wall Street's overnight fall.

(Read more: China stocks pare gains in volatile trade after spiking over 5%)

In other news, violent clashes continued in Egypt. The Muslim Brotherhood party, protesting the ousting of President Mohamed Morsi, called for a nationwide "millions' march of anger" on Friday, to protest against the military crackdown. Around 525 people have been killed in the unrest, according to the Egyptian ministry of health.

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

On Tap This Week:

FRIDAY: Consumer sentiment

What's Trending on CNBC.com: