The US bourse is set to open higher as European leaders get ready to meet.

New York - US stock index futures pointed to a lower on Friday, indicating the Dow and S&P 500 could extend their decline to a third day as investors continued to be wary of weakness in small-cap names.

* Small-caps weighed on Wall Street on Thursday, as the Russell 2000 briefly hit correction territory before pulling back. Investors are concerned prolonged weakness in small names could be a precursor of broader losses.

* The Dow and S&P 500 had their biggest daily decline in a month on Thursday, and the S&P closed under its 50-day moving average for the first time since April 15.

In a sign of increased investor caution, the CBOE volatility index had its biggest one-day bounce in a little over a month on Thursday, and the spread between the spot VIX and the 3-month VIX at one point tightened to its smallest since April 15.

* The Russell index will continue to be in focus on Friday.

It is currently 9.3 percent away from its early March record of 1,208.65 - less than the 10 percent decline that marks a correction - but has closed below its 200-day moving average in the past two session, a sign of weak momentum.

* J.C. Penney Co jumped 19.5 percent to $10 in premarket trading a day after posting an adjusted quarterly loss that was narrower than expected and sales that were above forecasts.

Nordstrom Inc rose 10 percent to $67.70 after posting earnings above expectations.

* S&P 500 futures fell 2.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract.

Dow Jones industrial average futures fell 16 points and Nasdaq 100 futures lost 7.25 points.

* Major indexes turned lower for the week in Thursday's decline.

The Dow is currently down 0.8 percent for the week while the S&P is off 0.4 percent and the Nasdaq is off 1.3 percent.

* Applied Materials reported revenue that was slightly ahead of expectations, while Autodesk Inc raised its full-year revenue view. Both results came out after the market closed on Thursday.

* Shares of Applied Materials rose 2.2 percent to $19.10 before the bell while Autodesk was up 4.6 percent to $50.

* In the latest economic data, housing starts jumped 13.2 percent in April while building permits hit their highest level in nearly six years, offering hope that the troubled housing market could be stabilising.

* Verizon Communications Inc rose 1.7 percent to $48.78 in premarket trading a day after Warren Buffett's Berkshire Hathaway Inc unveiled a new stake of 11 million shares in the company in a regulatory filing.

The filings also showed prominent hedge fund managers cut their exposure to high-profile Internet names like Netflix Inc in the quarter. - Reuters