The Commerce Department is expected to report Friday that the gross domestic product, the widely followed measure of the economy, shrank at an annual pace of 5.4 percent in the October-December period, a much faster descent than the 0.5 percent decline logged in the previous quarter. If economists' forecasts are correct, it would mark the weakest showing since the first quarter of 1982.
Investors are largely prepared for such a staggering number, believing the fourth quarter will likely be the worst period for the recession, now in its second year. But if the results are weaker, the market could fall further.
Meanwhile, there were more mixed earnings reports.
Consumer-products company Procter & Gamble Co. said its fourth-quarter quarter profit jumped 53 percent, boosted by a gain from the sale of its Folgers coffee business. But its sales dipped 3 percent on weakening demand for its products, which include Tide detergent, Olay skin cream and Crest toothpaste.
Also Friday, Honda Motor Co. slashed its 2009 profit target by more than half as its earnings dropped 90 percent in the latest quarter, hit by rising costs and falling sales in key markets.
Ahead of the market's open, Dow Jones industrial average futures fell 66, or 0.81 percent, to 8,046. Standard & Poor's 500 index futures fell 8.50, or 1.01 percent, to 834.30, and Nasdaq 100 index futures fell 10.50, or 0.87 percent, to 1,195.50.
A bit of good news came from Amazon.com Inc. late Thursday, which reported that its fourth-quarter profit rose 9 percent and easily surpassed analysts' forecasts. The online retailer also provided an optimistic forecast for 2009.
But there were also more layoffs. Japanese electronics maker NEC Corp. said it will cut 20,000 jobs worldwide as it reported a $1.46 billion loss for the fourth quarter.
Volatility has remained high this week, with the market zigzagging on a mix of earnings and economic news as investors try to gain any insight on what the rest of 2009 will bring. Unrelenting concerns about the banking industry have also added to the uncertainty on Wall Street.
On Thursday, the Dow Jones industrial average sank 226 points, while other indicators tumbled more than 3 percent, on news that unemployment claims reached a record high and that new home sales hit a record low. This erased all of the gains from the previous day, when stocks soared on hopes that the government will take bad debt off banks' books.
Bond prices rose early Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.83 percent from 2.87 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, fell to 0.21 percent from 0.23 percent late Thursday.
The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell 25 cents to $41.19 in premarket trading on the New York Mercantile Exchange.
Overseas, Japan's Nikkei stock average fell 3.12 percent. In early afternoon trading, Britain's FTSE 100 fell 0.92 percent, Germany's DAX index was down 1.80 percent, and France's CAC-40 was down 1.92 percent.