U.S. Stock Futures Decline

By Lauren Villagran, AP Business Writer

Friday September 14, 8:17 am ET
U.S. Stock Futures Fall As Investors Await Readings on Retail Sales, Consumer Sentiment

NEW YORK (AP) -- U.S. stock futures fell Friday as investors nervously awaited the latest readings on the economy's health -- some of the last data the Federal Reserve will consider ahead of next week's decision on interest rates.

After a week with little economic news, investors will pay close attention to data on industrial production, retail sales and consumer confidence, due out early Friday. Wall Street has been keen for a sense of how the recent credit squeeze and financial market turmoil will affect the broader economy -- and the Fed's decision on interest rates.

Investors widely expect the central bank to cut rates, but futures trading on Friday suggested jitters persist.

Dow Jones industrial futures dropped 52, or 0.40 percent, to 13,484. Standard & Poor's 500 index futures lost 6.30, or 0.42 percent, to 1,491.70, and Nasdaq 100 index futures shed 12.00, or 0.59 percent, to 2,012.50.

Also pressuring stock futures was news that the Bank of England approved emergency funding for lender Northern Rock PLC to head off a possible liquidity crisis. Northern Rock issued a profit warning and blamed the shortfall on credit market turmoil.

Investors in London reacted badly to that news, which heightened concerns about the viral nature of problems in the U.S. subprime mortgage market. Adding to the disappointment, a key house price index in Britain showed a 2.6 percent decline in September. The index is considered an indicator of future prices. Britain's FTSE 100 fell 1.84 percent.

Other European stock markets also slumped. Germany's DAX index fell 0.90 percent, while France's CAC-40 fell 0.98 percent.

Bond prices rose, as the 10-year Treasury note yield fell to 4.45 percent from 4.48 percent.

Economists polled by IFRMarkets.com expect August retail sales are expected to have edged up 0.1 percent, excluding auto sales, following July's 0.3 percent increase, while the University of Michigan's preliminary reading on September consumer sentiment is forecast to have weakened slightly. Economists expect industrial production rose 0.3 percent in August, on pace with July.

The Dow rose more than 130 points on Thursday, helped by strong gains in shares of McDonald's Corp., which raised its dividend, and General Motors Corp. on reports of progress with labor negotiations.

As talks with the United Auto Workers continued overnight, the union was expected to choose GM as the lead company in contract negotiations with the Detroit Three. Contracts between the UAW and GM expire Friday at midnight.

In Asia, Japan's Nikkei stock average rose 1.94 percent at the close, while Hong Kong's Hang Seng Index gained 1.47 percent.

Oil fell below the $80 a barrel mark in electronic trading before the opening of the New York Mercantile Exchange. Gold prices also weakened, as the U.S. dollar traded mixed against other major currencies.