Before the bell: Futures lower as Street takes a breather, awaits more data

Posted Oct 30th 2009 7:35AM by Melly Alazraki
Filed under: Before the Bell, International Markets, Market Matters, Sony Corp ADR (SNE), Chevron Corp (CVX), Alcatel-LucentADS (ALU), Duke Energy (DUK), Economic Data, MetLife Inc. (MET)

U.S. stock futures drifted lower Friday morning, indicating a weaker start on Wall Street, a day after a market rally that was fueled by strong economic reports. But as investors catch their breath, they also await cautiously for data on consumer spending and sentiment, as earlier data this week surprised to the down side.

On Thursday, the government reported the economy grew 3.5% in the third quarter. While the growth was mostly due to government stimuli, it was enough to lift stocks some 2% for the day. Treasury Secretary Timothy Geithner said Thursday the U.S. economy's return to growth shows some stability but recovery is fragile and needs nurturing.

Meanwhile, defaults by small and medium-sized U.S. businesses on the loans, leases and lines of credit they use rose in September as lenders remained reluctant to extend fresh financing, PayNet Inc reported on Friday.

Economic data due out Friday includes September personal income and spending at 8:30 a.m. Eastern. While income is expected to have remained flat, spending is estimated to have fallen in the month according to Briefing.com. With this report comes an interesting inflation gauge. A little after the market opens, Chicago manufacturing index for October and consumer sentiment will be released. Both are expected to have ticked up.

And of course, earnings season is still upon us. Sony (NYSE: SNE) posted on Friday a quarterly loss but it also trimmed its full-year loss forecast. Alcatel Lucent (NYSE: ALU) dropped in Paris after it reported a widening loss. Other companies due to post quarterly results include Chevron (NYSE: CVX), Duke Energy (NYSE: DUK) and MetLife (NYSE: MET).

Overseas, Asian stock markets snapped a three day losing streak following rallies in the U.S. as the strong GDP report spurred hopes of improved demand for the region's exports. European stock markets showed little movement Friday after strong gains the day before. Inflation in the euro-zone remained negative for a fifth consecutive month in October while unemployment continued to rise, the EU statistics agency said Friday, suggesting the region's economic recovery was sluggish.

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