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Futures Turn Higher After Economic News

Futures turned higher after several key economic news, but gains were limited after several major Italian banks declined sharply, triggering renewed worries over the European debt crisis.

Italian banks UniCredit and Intesa Sanpaolofell sharply and were briefly haltedfor hitting the daily downward limit amid pressure from Europe's debt crisis. The news comes after Moody's warned of a downgrade on Italian banks last week.

Futures were buoyed earlier after news EU and IMF officials agreed on extra spending cuts and tax rises by Athens to plug its funding hole.

On the economic front, U.S. economic growth was revised modestly higher at a rate of 1.9 percent in the first quarter, according to the Commerce Department, up from the previously estimated 1.8 percent. The revision was in line with economists' expectations. The economy expanded at a 3.1 percent rate in the fourth quarter.

Meanwhile, durable goods rose 1.9 percent in May, more than expected, as bookings for transportation equipment rebounded strongly. Economists had expected orders to rise 1.5 percent last month, according to a Reuters survey.

“This is very much like last year when we had the slow patch,” according to Scott Brown, Chief Economist at Raymond James, adding that the economy will avoid going through a doubled-dip, but growth is still likely to be very slow.

In the second half of the year, Brown expects gasoline prices to pare back and bank lending to increase to small businesses, which will be favorable for consumers.

Among earnings, Oracle posted higher than expected results after the bell Thursday but its shares fell in pre-market trade as analysts worried that spending on technology is slowing down.

Micron plunged after the chipmaker posted quarterly results below Wall Street expectations and warned of low visibility in a weak consumer PC market. In addition, at least two brokerages cut their price targets on the firm.

Williams made an unsolicited $4.9 billion cash bidfor Southern Union after-the-bell Thursday topping the pipeline company's $4.1 billion stock deal with rival Energy Transfer Equity .

Comcast climbed after Goldman Sachs added the parent company of CNBC to its "conviction buy" list.

Oil prices recovered slightly as the impact of the IEA announcement that it will release oil from reserves faded.

However, IEA Executive Director Nobuo Tanaka told CNBC in an interview that the agency is ready to release more oil and that it sometimes "had to bite."

European stocks rallied Friday morning but later pared back some of their gains after shares in two Italian banks reached limit-down and had to be suspended brieflyon worries over how they will be affected by the crisis.

COMING UP NEXT WEEK:

MONDAY: Personal income & spending, Fed's Kocherlakota speaks, Fed's Hoenig speaks, 2-yr note auction; Earnings from Nike
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 5-yr note auction, IMF board to select new chief
WEDNESDAY: Weekly mortgage apps, pending home sales index, oil inventories, 7-yr note auction, farm prices, Dell analyst meeting, Fed meeting on card fees; Earnings from Family Dollar, General Mills, KB Home, Monsanto
THURSDAY: Weekly jobless claims, Fed's Bullard speaks, Chicago PMI, End of QE2, Marathon Oil split takes place
FRIDAY: Consumer sentiment, ISM mfg index, construction spending, Biden's deadline for deficit plan, HP launches TouchPad, auto sales

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