NEW YORK (CNNMoney.com) - Stock futures lost ground Friday after the government released a weaker-than-expected reading on economic growth, but were still poised to gain as investors eyed strong earnings and upbeat overseas markets.

U.S. stock futures were off their earlier highs but were still indicating a higher opening for stocks.

The Commerce Department said that gross domestic product, the broadest measure of the nation's economic activity, rose at an annual 1.1 percent rate in the fourth quarter, down from the 4.1 percent growth pace in the third quarter.

Economists were looking for an 2.8 percent growth pace.

Investors and economists had expected slower growth, and even a weaker-than-forecast report is unlikely to spook stocks, said Jason Leander, vice president at Rothschild Investment in Chicago, in advance of the report

"We're seeing growth in a lot of other measures," he said. "I think you'll see an initial reaction (to a weak GDP report). But I don't think you'll see people pulling up stakes and running out."

Stocks instead may be eyeing strong earnings and strength in overseas markets.

Microsoft (Research) posted earnings that essentially met forecasts and issued positive guidance for the current period after the market close Thursday. It also said it had taken steps to increase production of its Xbox 360 video game player, whose supply constraints have crimped earnings in the last two quarters. Shares of Microsoft were up almost 4 percent in European trading.

Before the bell Friday, the nation's largest consumer products maker, Procter & Gamble, beat earnings forecasts and raised its guidance for 2006. Shares of the Dow component gained 1 percent in Europe following the report.

"Earnings are have been for the most part pretty darn good, unless you're a Detroit automaker," said Leander. "This market has some real legs. I think we're seeing some good carry over into today."

Major markets in Asia closed sharply higher Friday as Japanese markets posted a 3.4 percent gain after strong results from electronics and entertainment conglomerate Sony (Research). Major European markets were close to 1 percent higher in early trading, climbing to their highest levels since August 2001.

The good earnings news allowed investors to look past oil prices jumping above the $67 a barrel mark. The March light crude futures contract for NYMEX gained $1.07 to $67.33 a barrel in electronic trading, The March contract for Brent crude was up 93 cents to $65.85.

In other economic news, the government reports on December new home sales at 10 a.m. ET. Economists are looking for those sales to slow to an annual pace of 1.23 million in the month from 1.25 million in November. Earlier in the week, the National Association of Realtors reported the third straight month of slowing existing home sales. New home sales are seen as a more leading indicator of sales.

Treasury prices rose slightly, bringing the yield on the benchmark 10-year note down to 4.49 percent, from 4.51 percent late Thursday. The dollar was up against both the euro and the yen.

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