U.S. stock futures were positive this morning, pointing to a higher open Friday as lower oil prices, encouraging indications from the Federal Reserve regarding bank funding and a Lehman Brothers upgrade helped boost sentiment after two straight sessions of declines.On Thursday, higher oil prices, continued housing woes as well as a light earnings report from Oracle Corp. (NASDAQ: ORCL) and concerns over Google Inc. (NASDAQ: GOOG)'s outlook caused the second straight day of declines. The Dow industrials lost 120 points, or 0.97%, the S&P 500 fell 15 points, or 1.15%, and the Nasdaq Composite declines 43 points, or 1.87%.
Several indicators are due out today, some before the opening bell, and could affect the market's mood.
At 8:30 a.m., February reading of personal income and spending will be released, and with it an inflation gauge, the core PCE deflator.
Personal income is expected to rise 0.3%, same as last month, and spending 0.1% -- nearly flat -- compared to a 0.4% the month before. The gradual slowing in spending is even more pronounced when looking at real (inflation adjusted) spending. It's important to remember as we notice the trend of reduced spending in the last few months that it makes up some 70% of GDP and will be influential in determining Q1 GDP, or economic growth.
Meanwhile, the core PCE price index is expected to rise 0.1%, but stands at 2.2% yoy -- above the 1%-2% inflation 'comfort zone' of the Federal Reserve. The PCE index is the Fed's favored inflation gauge.
At 10:00 a.m., the March Michigan Sentiment index will be released. Economists expect the index to decline somewhat.
Several indicators are due out today, some before the opening bell, and could affect the market's mood.
At 8:30 a.m., February reading of personal income and spending will be released, and with it an inflation gauge, the core PCE deflator.
Personal income is expected to rise 0.3%, same as last month, and spending 0.1% -- nearly flat -- compared to a 0.4% the month before. The gradual slowing in spending is even more pronounced when looking at real (inflation adjusted) spending. It's important to remember as we notice the trend of reduced spending in the last few months that it makes up some 70% of GDP and will be influential in determining Q1 GDP, or economic growth.
Meanwhile, the core PCE price index is expected to rise 0.1%, but stands at 2.2% yoy -- above the 1%-2% inflation 'comfort zone' of the Federal Reserve. The PCE index is the Fed's favored inflation gauge.
At 10:00 a.m., the March Michigan Sentiment index will be released. Economists expect the index to decline somewhat.
Overseas, Asian stocks finished higher, while European stocks are climbing from earlier losses. In the U.K., the economy grew by 3% in 2007, but grew 0.6% in the final three months of the year. Fourth quarter GDP rose 2.8% on a year-on-year basis.
Oil prices fell Friday back below $107 a barrel, after jumping more than $1 a barrel in the previous session following the bombing of a key Iraqi oil pipeline heightened supply concerns. Meanwhile, Bloomberg reports that "the dollar headed for its biggest weekly decline in a month against the euro as traders raised bets the Federal Reserve will cut interest rates to avert a recession."
As has been the case the past few days, banks take front and center of the news. This morning, we hear Bear Stearns (NYSE: BSC) chairman James Cayne sold his entire stake in the investment bank after for $61 million as JPMorgan Chase (NYSE: JPM) is about to take it over. With BSC shares trading above $11, over the $10 bid from JPMorgan, this could indicate a better offer is not in the cards. BSC shares are down over 4.5% in premarket trading.
Also, Citigroup upgraded Lehman Brothers (NYSE: LEH) to Buy from Hold, with a price target of $65 due to valuation, the resilience it showed in the latest quarter and management's track record. LEH shares are up over 6.8% in premarket trading.
Meanwhile, Citigroup (NYSE: C)'s CEO Vikram Pandit keeps reshuffling top management at the bank. He replaced Ali Hackett and Tom Tesauro, co-heads of global equity finance and prime brokerage to be replaced by Nick Roe, who runs the European part of the prime brokerage unit. Citigroup's share are up 1.4% in premarket trading.
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