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Futures Rally After GE, Microsoft Earnings

U.S. stock index futures were higher Friday, propelled by strong earnings reports from General Electric and Microsoft, but uncertainty surrounding the euro zone kept investors on edge.

European stocks see-sawed in and out of the red in morning trading as yields on Spanish 10-year bonds rose again above the market-sensitive level of 6 percent and German Bunds rallied.

The pain of austerity is weighing on European markets and analysts wonder what country will give up its tough budget deficit targetnext.

Investors will be watching the two to see if Europe's weakening economy or a slowdown in Chinese growth have taken a toll on their earnings.

General Electric , part-owner of CNBC, beat expectations with operating earnings per share of 34 cents agains the 33 cents forecast.

Fellow Dow component McDonald's posted quarterly results that met expectations.

Honeywell reported earnings that beat analysts' expectations, and the industrial conglomerate also raised its full-year outlook, saying growth in U.S. and high-growth markets are more than offsetting softness in Europe.

Microsoft's quarterly results topped expectations after-the-bell Thursday. Some market pros said it might trigger a tech rally on Friday.

Meanwhile, a new insider trading investigation is underway involving a current employee of Goldman Sachs —an investigation that could complicate the prosecution of former Goldman board member Rajat Gupta.

And Sean Egan told CNBC Thursday the Securities and Exchange Commission had no reason to charge his credit-rating firm Egan-Jones Ratings with intentional misstatements when it applied to be a "nationally recognized'' ratings agency.

—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC

On Tap Next Week:

MONDAY: GM to restart Volt production; Earnings from ConocoPhillips, DR Horton, Hasbro, Xerox, Netflix, Texas Instruments
TUESDAY: S&P Case-Shiller home price index, new home sales, consumer confidence, FHFA home price index, 2-yr note auction, FOMC meeting begins, IBM shareholders meeting, Wells Fargo shareholders meeting; Earnings from AT&T, 3M, Unite Tech, US Steel, Amgen, Apple, Baide, Aflac
WEDNESDAY: Weekly mortgage apps, durable goods orders, oil inventories, FOMC meeting announcement, 5-yr note auction, Bernanke press conference, Coca-Cola shareholders meeting, GE Shareholders meeting, Hudson City shareholders meeting, USDA food prices outlook; Earnings from Boeing, Caterpillar, Eli Lilly, GlaxoSmithKline, AutoNation, Delta, Credit Suisse, Motorola Solution, Sprint, Akamai
THURSDAY: Jobless claims, Chicago Fed nat'l index, pending home sales index, 7-yr note auction, J&J shareholders meeting; Earnings from AstraZeneca, Bristol-Myers Squibb, Chrysler, ExxonMobil, PepsiCo, Royal Dutch Shell, Barclays, Pulte, Amazon.com, Starbucks, Zynga
FRIDAY: GDP, employment cost index, consumer sentiment; Earnings froM Chevron, Merck, P&G

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