Stocks set for lower open

NEW YORK (CNNMoney.com) -- U.S. stocks were poised for a lower open Friday after the government reported a smaller-than-expected decline in economic activity during the second quarter.

At 9:15 a.m. ET, Dow Jones industrial average, Standard & Poor's 500 and Nasdaq 100 futures were lower. They turned lower after the GDP report, which showed a smaller decline than the first quarter, which itself was revised to reflect a steeper decline.

Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins in New York.

On Thursday, stocks surged to their highest level in nearly 9 months, as investors reacted to the latest wave of better-than-expected earnings and forecasts.

Manus Cranny, market analyst at MF Global in London, said that a "dramatically better-than-expected" earnings season was driving stock futures and the recent rally, but he remains skeptical about the fundamental health of the markets, with much of the second-quarter profits "contrived from cost cutting."

"It's not real growth," said Cranny. "It's not green shoots. It's an assisted form of convalescence."

Economy: The nation's gross domestic product, the broadest measure of U.S. economic activity, fell at a smaller-than-expected annual rate from April to June.

The government said GDP shrank 1% in the second quarter. Economists were expecting the report to show a 1.5% decline in the period.

While the reading was better than expected, it was the fourth quarter in a row of negative GDP. The first-quarter reading was revised lower to a decline of 6.4%.

It is the first quarter in which President Obama was fully in charge of the economy. Investors will be looking to see what impact stimulus spending and tax cuts, which kicked in during the quarter, had on the economy.

Corporate results: Oil giant Chevron (CVX, Fortune 500) reported a 77% drop in second-quarter profit as the weak economy curbs demand for energy.

The company said it earned 87 cents per share in the quarter, versus estimates for a 97 cent per share profit.

On Thursday, rival Exxon Mobil (XOM, Fortune 500) reported a 66% drop in quarterly profit.

World markets: Asian shares rallied, with Japan's Nikkei and the Hang Seng in Hong Kong both up nearly 2%. Major European markets were modestly lower in midday trading.

Money and oil: The dollar edged up versus the yen, but slipped against the euro and the British pound. The price of oil dropped 41 cents a barrel to $66.53.