Stock Market Today: Futures Fall, U.S. Consumers Lift Their Spending

NEW YORK (TheStreet) -- U.S. stock index futures were retreating Monday, tracking losses in the international markets as demonstrations in Hong Kong dented sentiment.

Dow Jones Industrial Average futures were 92 points lower, or 86.15 points under value. S&P 500 futures were down 11.5 points, or 10.45 points below fair value. Nasdaq futures sank by 24 points, or 22.47 points below fair value. U.S. stocks rallied into the close Friday but ended with the biggest weekly decline since Aug. 1, after an upward revision to U.S. second-quarter GDP figures fueled expectations that the Federal Reserve will stay the course, moving against the tide of easing at other major central banks.

European stocks drifted lower on Monday, as a fall in euro-area economic confidence cast further doubts about the pace of recovery, while continued violent clashes between pro-democracy protesters and police in Hong Kong weighed on Hong Kong's benchmark index.

U.S. personal income increased 0.3% in August, matching estimates, the Bureau of Economic Analysis reported Monday. Personal spending rose by a slightly higher-than-expected 0.5%.

Pending homes sales data for August is scheduled for release at 10 a.m. EDT Chicago Fed President Charles Evans is expected to speak before the National Association of Business Economics in Chicago starting at 9 a.m.

The markets were also awaiting the European Central Bank's monetary policy decision on Thursday and the nonfarm payrolls report for September on Friday.

Ari Wald, the head of technical analysis at Oppenheimer, said he thinks near-term conditions for the S&P 500 are unfavorable due to the combination of high levels of investor sentiment recently and unconfirmed internal breadth readings. However, his tactical recommendation is to buy pullbacks in the S&P 500 because the longer-term evidence remains bullish, in his view. His key arguments against a bull market top are that long-term support levels are intact, steep declines typically don't start from a low VIX level, negative oil price momentum is a tailwind, and relative equities valuations vs. bonds are not a threat.

"We view the index's trend as positive as long as the 1,900 support is upheld and expect higher highs once near-term conditions strengthen," said Wald.

In company news Monday, Pacific Investment Management Co., or Pimco, suffered roughly $10 billion of withdrawals following the departure on Friday of co-founder Bill Gross, a person familiar with the matter told The Wall Street Journal.

SoftBank is in talks to buy or otherwise link up with DreamWorks Animation (DWA) , people familiar with the negotiations told the Journal. DreamWorks soared over 25% in premarket trades.

Yahoo! (YHOO) shares surged 4.4% to close at $40.66 on Friday after an activist investor suggested the Internet company look into doing a deal with AOL (AOL) .

Apple (AAPL) will be accused of prospering from illegal tax deals with the Irish government for more than two decades when the European Commission this week unveils details of a probe that could leave Apple with a record fine of as much as several billions of euros, the Financial Times reported. Apple lost 1.1%.

NiSource (NI) said Sunday its board approved splitting the company into two publicly traded companies -- a utilities business and a pipelines businesses.

-- By Andrea Tse in New York

Follow @AndreaTTse

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