Stocks May Open Lower On Disappointing Spending Data - U.S. Commentary

(RTTNews) - After ending the previous session mostly higher, stocks may move back to the downside in early trading on Friday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 18 points.

The negative sentiment is partly due to the release of a report from the Commerce Department showing an unexpected drop in personal spending in the month of April.

The report said personal spending edged down by 0.1 percent in April after surging up by 1.0 percent in March. The modest decrease surprised economists, who had expected spending to rise by 0.2 percent.

The unexpected drop in spending came despite a continued increase in personal income, which rose by 0.3 percent in April following a 0.5 percent increase in March. The increase marked the fourth straight month of growth and matched expectations. While most economists are likely to continue to expect a rebound in economic activity in the second quarter, the data may still lead to some trepidation after yesterday's report showing a contraction in first quarter GDP.

Not long after the start of trading, MNI Indicators is scheduled to release a separate report on Chicago-area business activity in the month of May. The business barometer is expected to dip to 61.0, although a reading above 50 would indicate continued growth.

Thomson Reuters and the University of Michigan are also scheduled to release their revised report on consumer sentiment in May.

The consumer sentiment index for May is expected to be upwardly revised to 82.5 from the mid-month reading of 81.8, which was down from 84.1 in April.

Stocks moved mostly higher over the course of the trading day on Thursday, more than offsetting the modest weakness seen on Wednesday. With the gains on the day, the S&P 500 reached another new record closing high.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow rose 65.56 points or 0.4 percent to 16,698.74, the Nasdaq climbed 22.87 points or 0.5 percent to 4,247.95 and the S&P 500 advanced 10.25 points or 0.5 percent to 1,920.03.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index dropped by 0.3 percent, while China's Shanghai Composite Index edged down by 0.1 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is just below the unchanged line, the U.K.'s FTSE 100 Index and the French CAC 40 Index are down by 0.2 percent and 0.4 percent, respectively.

In commodities trading, crude oil futures are falling $0.64 to $102.94 a barrel after climbing $0.86 to $103.58 a barrel on Thursday. Meanwhile, gold futures are sliding $2.30 to $1,254.80 an ounce. In the previous session, gold dipped $2.60 to $1,257.10 an ounce.

Among currencies, the U.S. dollar is trading at 101.61 yen compared to the 101.79 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.3615 compared to yesterday's $1.3602.