Indications: Stock futures remain lower after retail report

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By Polya Lesova & Kate Gibson, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures fell on Friday after China hiked its deposit-reserve ratio, escalating worries over global economic growth and prompting traders to sell stocks and commodities, and buy the U.S. dollar.

Stock futures retained the bulk of early losses after the government reported U.S. retail sales climbed 0.5% in January, more than the 03% jump anticipated by economists.

"While better than expected, January is both a clearance month and gift card redemption month that influences consumer behavior and today's news doesn't move the needle enough to add anything new to the economic outlook," Peter Boockvar, equity strategist at Miller Tabak & Co., wrote in an early note.

Futures on the Dow Jones Industrial Average dropped 50 points, or 0.5%, to 10,060.

S&P 500 futures fell 5.3 points to 1,071.3 and Nasdaq 100 futures fell 8.75 points to 1,766.75.

Later economic reports include inventories for December and consumer sentiment for February at 10 a.m. Eastern time.

The U.S. Energy Information Administration will also release delayed data on petroleum and natural-gas inventories.

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The People's Bank of China announced Friday it will raise the ratio of reserves banks must set aside by 0.5 percentage points, marking the second such action this year.

The central bank has been tightening monetary policy in an attempt to restrain bank lending. Its moves, however, have raised worries over a potential slowdown in China's economic growth.

"The PBOC move risks eroding any stabilization emerging in global equities" following the European Union's pledge on Thursday to support Greece, said Ashraf Laidi, chief market strategist at CMC Markets.

The news from China sent the U.S. dollar sharply higher, while it also prompted traders to sell stocks and commodities such as oil and gold.

Oil futures fell $1.16 to $74.12 a barrel, while gold futures dropped $8.80 to $1,088.9 an ounce. The concern is that slowing growth in China will lead to a decline in its appetite for commodities.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 80.56, +0.57, +0.71%) , which tracks the greenback against a basket of other major currencies, rose 0.5% to 80.46. The euro also was weak, down not just on the China news but also affected by news of a paltry 0.1% expansion of the euro-area economy during the fourth quarter and a downturn in industrial production data. There also was a continued paucity of details over what level of support other European nations will provide debt-ravaged Greece.

Motorola Inc. /quotes/comstock/13*!mot/quotes/nls/mot (MOT 6.65, +0.02, +0.30%) rose 3.2% in premarket trade after it said late Thursday that it plans to split itself up into two separate companies.

Skillsoft /quotes/comstock/15*!skil/quotes/nls/skil (SKIL 9.76, +0.07, +0.72%) shares jumped more than 13% after it said a group of private-equity firms will buy it for $1.1 billion, or $10.80 a share.

U.S. equities finished with strong gains on Thursday, after a E.U. pledge to support Greece.

Polya Lesova is reporter for MarketWatch, based in Frankfurt. Kate Gibson is a reporter for MarketWatch, based in New York.