U.S. stocks were on track to post their worst weekly losses in nearly a year on Friday after data showed meager growth in the economy while a setback in Washington over a debt deal kept investors nervous.
The U.S. economy grew less than expected in the second quarter, at a 1.3 per cent annual rate, as consumer spending barely rose amid higher gasoline prices.
"Disappointing number, but I'm not surprised, considering the uncertainty in the market over the debt ceiling, regulations and so forth," said Matthew Keator, partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
"Structurally, corporations are doing a good job, but on the macro side, with all the uncertainty, it isn't surprising that we're seeing this type of headwind."
S&P 500 futures SPc1 fell 12.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 were down 115 points, and Nasdaq 100 futures NDc1 lost 20 points.
The S&P was down 3.3 percent so far this week. The last time the index fell this much on a weekly basis was in mid-October last year.
The S&P may test its 200-day moving average in early trading, currently at 1,284.27.
U.S. House of Representatives Speaker John Boehner's failure to round up enough votes for his plan late Thursday exposed a rift in the Republican Party that is hampering efforts to reach a compromise to raise the U.S. debt ceiling before a Tuesday deadline.
House Republicans are due to meet at 10 a.m. EDT (1400 GMT) to discuss a way forward.
"The fear factor of the debt ceiling crisis is becoming a major one as we near the deadline," said Peter Cardillo, chief market economist at Avalon Partners in New York. "There is a possibility that we might the test the 1,275 level on the S&P".
On Thursday, the S&P 500 fell for a fourth straight day, closing near 1,300 with buyers on the sidelines as lawmakers struggled to hash out an agreement on the budget deficit and debt ceiling. For the week, the index was down 3.3 percent.
Chevron Corp , the second-largest U.S. oil company, reported a 43 per cent jump in quarterly profit, beating estimates as strong oil prices and fatter refinery margins offset a drop in oil output. Still, shares fell 0.8 percent to $104.20 in premarket trading.
In other economic data, the Institute for Supply Management-Chicago will release the July business barometer at 9:45 a.m. EDT (1345 GMT). Economists forecast a reading of 60.0 in the month, compared with 61.1 in June.
The Thomson Reuters/University of Michigan Surveys of Consumers July final consumer sentiment index is reported at 9:55 a.m. EDT (1355 GMT). Economists look for a reading of 64.0, compared with 63.8 in the preliminary July report.
The euro zone debt crisis is also a concern to markets. Rating agency Moody's put Spain on review for a possible downgrade on Friday, adding to worries that a Greek rescue package has done little to halt the spread of Europe's debt crisis.