WSJ: US Stock Futures Pare Drop As Consumer Spending Rises
By Donna Kardos Yesalavich
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--U.S. stock futures pared their earlier declines Monday morning after data showed U.S. consumers accelerated their spending in July although income growth remained sluggish.
Dow Jones Industrial Average futures were recently off 8 points at 10133, while Standard & Poor's 500 futures edged up less than a point to 1064 and Nasdaq Composite futures were flat at 1789. Prior to the data, Dow futures had been down 22 points, S&P 500 futures were off 1 point and Nasdaq futures were down 2 points. Changes in U.S. stock futures do not always accurately predict early stock moves after the open.
Consumer spending rose 0.4% last month after staying flat in June, the Commerce Department said in a report Monday. But their incomes increased less than expected, up 0.2% after remaining unchanged in June. Economists surveyed by Dow Jones Newswires expected the data to show income climbed 0.3% in July and spending rose 0.4%.
The economy's weakness kept a lid on prices in July, Monday's data showed. The core price index for personal consumption expenditures, which excludes food and energy prices because of their volatility, rose 0.1% in July from June. The overall PCE price index, which includes food and energy prices, rose 0.2% last month compared to June and increased 1.5% on a year-over-year basis.
At an unscheduled meeting on Monday, the Bank of Japan extended its emergency-lending program in an effort to stem the rise of the yen and support the sluggish economic recovery. In Tokyo, the Nikkei Stock Average ended up 1.8%, while the Japanese yen gained on the news, with the U.S. dollar falling against the yen.
The dollar rose against the euro and the U.S. Dollar Index, reflecting the U.S. currency against a basket of six others, edged up 01.1%. Treasurys also advanced, pushing the yield on the 10-year note down to 2.59%. Crude-oil futures slipped while gold futures rose.
Among stocks in focus, Genzyme jumped 4.7% premarket after Sanofi-Aventis publicly disclosed its offer to buy U.S. biotechnology firm Genzyme for $69 a share, or $18.5 billion. Sanofi edged up 0.5% premarket.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
