Wall Street stocks were set to resume their punishing decline on Friday after more gloomy data from the housing sector outweighed some relatively upbeat earnings elsewhere.

Home construction fell much more than expected to its lowest level in 17 years, while building permits - a sign of future construction - slid to its lowest since 1981, according to government figures, the latest in a series of grim updates that have illustrated the severity of the economic downturn.

Less than an hour before the opening bell, S&P 500 futures were down 7.4 points at 933.60. Nasdaq futures were down 19.25 points at 1303.75, while futures for the Dow Jones Industrial Average were down 85 points at 8881.

Honeywell edged up 0.2 per cent to $31.00 in pre-market trade after the diversified manufacturer became the latest in a series of companies to overshoot quarterly earnings forecasts. However, the company trimmed its guidance for the rest of the year.

Technology could receive a boost after a trio of companies in the sector reported better-than-expected results after the bell on Thursday.

Google rose 8.4 per cent to $382.51 after the search group's profits surpassed Wall Street forecasts, although Eric Schmidt, chief executive, warned of "uncharted territory" due to the financial crisis.

IBM rose 1.6 per cent to $92.99 after the group said emerging market growth would help it meet long-term profit forecasts. Advanced Micro Devices gained 9.2 per cent to $4.50 after the chipmaker also surprised Wall Street with third-quarter earnings ahead of expectations.

Meanwhile, money markets once again showed signs of easing. The rate at which banks lend to each other, measured by overnight dollar Libor, fell 27 basis points to 1.67 percent while three-month dollar Libor fell 8 basis points per cent to 4.42 per cent.

In the previous session, stocks endured extreme volatility although a late-afternoon rally pushed the market sharply higher, led by energy groups even as oil slid below $70 a barrel.

European stocks were higher ahead of Friday's open on Wall Street. The FTSE Eurofirst 100 index added 2.3 per cent to 878.24 . Asian equity markets closed mainly lower, although Japan bucked the trend.

Bond yields were lower. The yield on the two-year and ten-year Treasury notes were 3 basis points lower at 1.582 per cent and 3.926 per cent, respectively.

The dollar gave back some of its gains, down 0.1 per cent against the pound and 0.9 per cent against the yen.

Gold was trading $13.10 lower at $791.40 per troy ounce.

Oil prices were slightly higher early in New York. US crude prices were $0.77 higher at $71.46 a barrel.