Stocks smile about Countrywide

NEW YORK (CNNMoney.com) -- Stock futures moved higher Friday as an upbeat earnings outlook from embattled mortgage lender Countrywide and solid results from software giant Microsoft offset fears about record-high oil prices.

At 8:40 a.m. ET, stock futures were pointing to higher open for Wall Street when compared to fair value.

Countrywide Financial, the nation's leading mortgage lender, reported an eye-popping loss of $1.2 billion during quarter - its first in 25 years. But the company said that it would return to profitability during the fourth quarter of 2007 and in 2008.

The report was viewed by investors and economists as an important indicator of when mortgage markets, and the housing market overall, can start on a road to recovery.

Countrywide (Charts, Fortune 500) shares surged 18 percent higher in pre-market trading on the news.

Higher oil prices also remained in focus as crude hit a new trading high of $92.22 in Asia early Friday before retreating. But prices were still higher in electronic trading even after the retreat. The front-month crude contract jumped $3.36 to settle at a record close of $90.46 a barrel in New York on Thursday, the first time it had closed above the $90 benchmark.

Oil prices were blamed for U.S. stocks closing slightly lower Thursday, although an afternoon rally pared much of the earlier losses.

After the close Thursday, Dow component Microsoft (Charts, Fortune 500) reported solid results. The company posted a rise in profit and revenue that exceeded analysts' estimates.

The company reported strong sales of its Vista operating system and "Halo 3" video game. Shares of Dow component Microsoft soared 10 percent in Frankfurt early Friday.

The economic calendar is light. The only major release is the University of Michigan's final reading on consumer sentiment in October. That report is due at 10 a.m. ET.

On the corporate front, Bank of America (Charts, Fortune 500), the nation's No. 2 bank, announced it is exiting the wholesale mortgage business and eliminating about 700 jobs.

Merrill Lynch (Charts, Fortune 500) CEO Stanley O'Neal could lose his job after approaching Wachovia (Charts, Fortune 500) about a potential merger without first getting board approval, the New York Times reported.

Embattled Web phone provider Vonage Holdings (Charts) saw its shares soar 71 percent in after-hours trading after it announced it settled a patent lawsuit brought by Verizon Communications that had cast doubt over its future. Vonage will pay a maximum of $120 million to settle the dispute. Shares of Dow component Verizon were unchanged in after-hours trading on the news.

As labor talks resume between Ford Motor (Charts, Fortune 500) and the United Auto Workers, Associated Press is reporting that the union has agreed in principle on the embattled automaker's wish to further trim factory jobs.

Talks between Ford and the UAW have taken a back seat while the union reached deals with rivals General Motors and Chrysler. The ratification process with Chrysler is due to conclude over the week, with rank and file at the last major local set to vote Friday.

Treasury prices fell, lifting the yield on the benchmark 10-year note to 4.38 percent from 4.35 percent late Thursday.

The dollar hit another record low against the euro in early trading, but it was slightly higher versus the yen.

In global trade, Asian stocks rallied and finished the session higher. European markets were also broadly higher.