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Stock Futures Remain in Red After Personal Income, Spending Data

NEW YORK (TheStreet) -- Stock futures stayed in the red Friday, pointing to a lower start on Wall Street as investors digested a personal income and spending report and pondered its implications for the Federal Reserve's plans on stimulus.

The Bureau of Economic Analysis reported that personal income ticked down less than 0.1% in April after rising 0.3% in March. The change disappointed, as economists, on average, were expecting a rise of 0.1% in April. The personal spending figure also missed expectations, falling 0.2% after increasing 0.1%. Economists were expecting a rise of 0.1%. Still, the personal saving rate, a measure of personal savings as a percentage of disposable personal income, held at a low 2.5% in April.

The core PCE price index revealing underlying inflation trends increased less than 0.1% after a rise of 0.1%. A 0.1% gain was expected.

"The tone of the next few economic reports will provide the kind of confirmation that the Fed will need to determine the direction of the recovery," said Millan Mulraine, U.S. director of research and strategy at TD Securities in New York.

Futures for the S&P 500 were falling 8.25 points, or 7.51 points below fair value, to 1,645.25.

U.S. stock markets rose Thursday after weaker-than-anticipated reports on U.S. growth and the housing market fueled sentiment the Fed will maintain its aggressive stimulus measures.

"There is a growing perception that the Fed may well continue to push reserves into the system a while longer given the weaker-than-expected economic data of the past several days," Dennis Gartman, an economist and trader, said in his daily Gartman letter.

Sony (SNE) was down 3.26% to $20.16 in premarket trading. The company has hired Morgan Stanley and Citigroup to help evaluate options for its entertainment business, CNBC reported. Hedge fund manager Daniel Loeb has proposed that Sony spin off up to 20% of its movie, TV and music division.

Splunk (SPLK) shares were slumping 3.27% to $43.74 after the company raised its full-year revenue outlook on Thursday, but forecast negative second-quarter operating margins as it continues to invest heavily in data platform, content and Software-as-a-Service offerings. Splunk predicted second-quarter operating margin of between negative 4% and negative 6%.

Lions Gate (LGF) shares were rising 3.82% to $29.10 after posting on Thursday fiscal fourth-quarter earnings and revenue that topped Wall Street's expectations as it benefited from home video sales of the finale to its "Twilight" franchise.

Krispy Kreme Doughnuts (KKD) was popping nearly 10% to $15.68 after the doughnut chain hiked its full-year outlook on strengthening sales. The company booked first-quarter earnings that beat estimates by three cents, at 20 cents a share, with revenue also topping expectations.

Futures for the Dow Jones Industrial Average were off 78 points, or 69.53 points below fair value, to 15,241. Futures for the Nasdaq were behind by 13 points, or 13.48 points below fair value, to 2,997.

At 9:45 a.m., the Chicago PMI is expected to show an increase to 50 in May from 49 in April.

The final estimate on the May University of Michigan Consumer Sentiment Index is forecast to remain at 83.7. The report will be released at 9:55 a.m.

The FTSE 100 in London was down 1.08% while the DAX in Germany was falling 0.93%. The Nikkei 225 in Japan settled up 1.37%, while the Hong Kong Hang Seng index fell 0.41%.

July crude oil futures were falling 79 cents to $92.82 a barrel, while August gold futures were down $1.30 to $1,410.70 an ounce.

The benchmark 10-year Treasury was down 1/32, pushing the yield up to 2.074%. The dollar was rising 0.39% to $83.37 according to the U.S. dollar index.

Written by Andrea Tse in New York

>To contact the writer of this article, click here: Andrea Tse.

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