US stock futures lower, on track for down week

NEW YORK, May 16 (Reuters) : US stock index futures fell on Friday, indicating that 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-cap stocks weighed on Wall Street on Thursday, as the Russell 2000 briefly hit correction territory before pulling back. Investors were worried that prolonged weakness in small names could be a precursor to 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 will continue to be in focus on Friday. While the index is currently 9.3 per cent away from its early March record of 1,208.65 - less than the 10 per cent decline that marks a correction - it has closed below its 200-day moving average in the past two session, a sign of weakening momentum.

J.C. Penney Co jumped 19.5 per cent 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 also posted earnings above expectations.