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US stock futures advancing

US stock futures advanced ahead of a report on housing starts unlikely to signal a bottom to the troubled market. The day features the expiration of key options and futures contracts, which could throw volatility into the session.

S&P 500 futures rose 3.3 points to 1,427.90 and Nasdaq 100 futures added 4.25 points to 2,040.00. Dow industrial futures rose 25 points.

U.S. stocks ended with sizeable gains on Thursday, helped by a fall in oil prices, Carl Icahn's plan to push Yahoo into Microsoft's hands and CBS Corp.'s deal to buy Cnet Networks. The Dow industrials rose 94 points, the S&P 500 added 14 points and the Nasdaq Composite rose 37 points.

Friday's calendar includes housing starts figures for April, due 8:30 a.m. Eastern, as well as the University of Michigan's consumer confidence gauge for May, which is due around 10 a.m.

In a new audio message, al-Qaida leader Osama bin Laden said the terror organization will continue to wage holy war against Israel and its allies, news reports said. The tape comes as Israel marks its 60th anniversary.

Crude oil futures got a bid, with oil up $1.28 to $125.40 a barrel. Goldman Sachs lifted its second-half oil price forecast to $141 a barrel from $107 a barrel.

"To balance trend global GDP growth of 3.8% against trend supply growth of 1.0%, prices need to rise on average 14% from here in the second half," the brokerage said.

The dollar lost some ground vs. the euro but otherwise traded in a tight range.

Gold futures rose $6.20 to $886.20 an ounce.

The retail sector will be in the spotlight as Nordstrom and Kohl's both reported declines in first-quarter profit and warned over annual results.

Goldman Sachs cut its view of U.S. department stores to neutral from attractive and downgraded J.C. Penney and Nordstrom to neutral from buy. The broker said it cuts its view on the sector after its commodity team's revised up 2008 oil price forecasts to $149 a barrel from $115 a barrel.

"We believe this material shift will result in higher gasoline prices, which should further crowd out consumer discretionary spend and dampen sentiment," Goldman Sachs said.

It also upgraded TJX Cos. to buy from neutral and removed Kohl's Corp. from its conviction-buy list in favor of Wal-Mart Stores.

Also in the retail space, Abercrombie & Fitch is due to report quarterly results.

Yahoo will continue to be in the spotlight as The New York Post reported that a search-advertising pact with Google will allow anyone else to bid for the right to serve up ads tied to keyword searches.

Separately, Yahoo announced a pact with WPP on Internet advertising.

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