To Dell in a handbasket

NEW YORK (CNNMoney.com) -- Disappointing results and outlook from tech bellwether Dell, combined with another selloff in overseas stocks, could knock U.S. stocks for an initial big loss Friday.

At 8:32 a.m. ET, Nasdaq & S&P futures, which predict the direction of stocks at the open, were sharply lower. S&P futures had been up in the early morning hours, but a selloff in stocks in Asia, followed by a fall in European stocks seemed to be roiling U.S. investors once again.

Asia stocks ended mixed, with Tokyo's Nikkei down for a fourth straight session while Chinese stocks, the catalyst for this week's worldwide selloff, gained ground. Europe was also lower after opening flat.

David Kelly, a managing director and economic adviser for Putnam Investments, said the volatility in U.S. markets this week is likely not over.

"I think the market is still suffering from the after-tremors of what happened Tuesday," he said, referring to the sharp selloff in stocks following the declines in Chinese equities. "Look at Thursday. There was no huge news and the markets were all over the place."

Dell (Charts) reported a 33 percent decline in fourth-quarter profit, and warned that growth and profit margins will be under pressure for the next few quarters. Shares fell 2 percent in after-hours trading Thursday.

Kelly said that while much of the problem with Dell's results and outlook were company specific, the report did reinforce broader concerns for the market about weak business spending that had been highlighted in various other economic reports this week.

"Why, with corporate profits so high, is corporate technology spending not stronger?," he asked rhetorically. "The businesses have got the money, they just don't have the nerve."

He said that investors are therefore already looking ahead to next Friday's February employment report, which comes a week later than normal this month. Economists surveyed by Briefing.com are forecasting that employers added a relatively modest 100,000 jobs in February, up from the 111,000 gain in January, and that unemployment stayed at 4.6 percent.

The only economic report this Friday is the University of Michigan's preliminary reading on consumer confidence in February. Economists are forecasting that index stayed at 93.3. A reading on consumer confidence earlier in the week from the Conference Board rose to a five-year high.

But Kelly said there's much less concern in the markets right now about consumers than about business spending.

Oil turned lower after being narrowly higher in early trading. U.S. light crude fell 20 cents to $61.80 a barrel in electronic trading.

Treasury prices were rallying on the decline in stock futures, taking the 10-year note yield to 4.53 percent from 4.55 percent late Thursday. The dollar was higher against the euro but lower against the yen in early trading.

After the bell Thursday, Warren Buffett's Berkshire Hathaway (Charts) reported a record gain in book value was $16.9 billion, as it added to its holdings with investments in 2006 in Conoco Phillips (Charts), Johnson & Johnson (Charts), and Korean steel company POSCO, along with additional investments in British supermarket company Tesco, US Bancorp (Charts) and USG (Charts).

It also said it had made $1.9 billion in additional investment in two other companies that it did not identify because it is still adding to its holdings. Conoco Phillips and J&J both saw their shares rise in after-hours trading on the news of Berkshire investment.

Also after the bell Thursday, Google (Charts) that the Securities and Exchange Commission nearly a year ago had called into question how it accounted for income taxes. The company said it is confident its accounting is proper, but it is still working to resolve the SEC questions. Shares of Google slipped only 1 cent in after-hours trading following the filing.

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