US index futures retreat as tech industry shows weak earnings

U.S. stock-index futures dropped, hinting benchmarks will retreat from record high levels, as earnings from Microsoft Corp. and Google Inc. missed analysts’ estimates.

Futures on the Standard & Poor’s 500 Index expiring in September fell 0.1% to 1,678.3 at 10:45 a.m. in London. Future Contracts on the Dow Jones Industrial Average sank 29 points, or 0.2%, to 15,452 today.

U.S. stocks surged yesterday, sending the S&P 500 and the Dow average to record highs, as earnings from Morgan Stanley and UnitedHealth Group Inc. beat estimates and jobless claims declined to a two-month low. The S&P 500 has climbed 0.6% this week, on track for a fourth straight gain.

Federal Reserve stimulus and better-than-forecast corporate earnings have triggered a boost in stocks worldwide, with the S&P 500 jumping as much as 150% from its March 2009 low. Yesterday’s rally pushed the benchmarks estimated 2013 price-to-earnings ratio to 15.3, the highest since April 2010.

Around 13 companies in the S&P 500, including Honeywell International Inc. and General Electric Co., were scheduled to post quarterly results today. Earnings per share topped estimates at about 71 percent of index members that have reported for the quarter so far according to Bloomberg.

General Electric Co. reported a second-quarter profit that beat analysts’ estimates as demand for jet engines and drilling equipment drove it to a record. Adjusted profit from continuing operations fell 8% to $3.7 billion, or 36 cents a share, from $4.1 billion, or 38 cents, a year earlier, the Connecticut-based company said today in a statement. “We expect margin expansion to continue and segment profits to grow in the second half of the year,” CEO Jeffrey Immelt said in the statement. The shares added 1.6% to $24 at 6:37 a.m. EDT in pre-trade.

Google slid 4% to $874.5 in pre-market New York trading after second-quarter sales and profit also missed estimates as ad pricing and Motorola sales were the main reason for the fall.

Microsoft lost 6.3% to $33.21 after the company reported fourth-quarter profit that missed analysts’ projections by the biggest margin in at least a decade amid weaker demand for personal computers running Windows.

AMD declined 4.7% to $4.42 in New York even after its sales forecast topped some estimates. Credit Suisse Group AG and Morgan Stanley downgraded companys shares, to “underperform” and “underweight” respectively. The stock has surged 93% so far this year.