Futures Sell Off On Weak GDP Reading

Wall Street was heading for a sharply negative open on news that economic growth was even worse than expected.

Gross domestic product for the second quarter came in at an anemic 1.3 percent, worse than the 1.8 percent expectation and likely to raise fears of a double-dip ahead.

Futures had been negative earlier but sold off sharply on the GDP news.

That added to an already pessimistic feeling after House of Representatives Speaker John Boehner failed to rally enough support for his plan to raise the debt ceiling before Tuesday’s deadline.

House Republicans are due to meet at 10 am New York time to discuss a way forward, Reuters said.

The Institute of Supply Management Chicago releases its July index of manufacturing activity at 9:45 am, while the University of Michigan releases July final consumer sentiment index at 9:55 am.

Dow component Merck reported earnings of 95 cents per share that met analyst estimates.

Fellow bluechip index member Chevron said it earned $3.85 a share, against expectations of $3.56, though revenue was a bit below estimates, sending shares slightly lower.

Elsewhere in earnings, Arch Coal posted earnings of 44 cents per share, well below Reuters estimates of 60 cents, sending shares down nearly 7 percent in premarket trading.

Amgen recorded a profit of $1.37 a share, beating estimates of $1.28, and its shares up about 2.5 percent.

In deal news, Allied Healthcare Shares exploded 57 percent on news that it would be purchased by Saga Group for $3.90 a share.

France's Total posted lower quarterly earnings on Friday as higher crude prices failed to make up for unfavorable exchange rates, production losses in the North Sea and Libya, and a weak refining business, Reuters said.

Meanwhile the head of the Libyan rebels' military campaign against Muammar Gaddafi was shot dead by assailants on Thursday, the top rebel leader said, according to Reuters.

Data out of Europe showed euro zone inflation slowed unexpectedly in July. The 2.5 percent figure makes it less certain that the European Central Bank will raise rates at its meeting next week.