Stock futures point to modestly lower opening
By STEPHEN BERNARD
AP Business Writer
NEW YORK (AP) – Stocks are headed for a modest decline Friday, erasing some of the big gains racked up a day earlier after the government said the economy grew more than expected in the third quarter.
Overseas markets were mixed.
Investors welcomed a report showing the economy grew at 3.5 percent in the third quarter, but much of that growth was fueled by government stimulus programs. With those programs winding down, the economy might not be able to sustain such rapid improvement after the economy shrank for four straight quarters.
A Labor Department report due out Friday at 8:30 a.m. EDT (1230 GMT) on personal spending and income from September will provide further details into the health of the consumer. The strength of consumers is considered vital to a recovery because their spending accounts for more than two-thirds of all U.S. economic activity.
Without government incentives and stimulus programs, it is widely expected consumer spending will have to rise significantly to extend the economic recovery.
Economists polled by Thomson Reuters expect consumer spending dropped 0.5 percent last month, following a 1.3 percent jump in August. August’s growth was fueled by the government’s Cash for Clunkers auto program.
Spending likely dropped as income was flat in September after rising 0.2 percent in August.
Ahead of the opening bell, Dow Jones industrial average futures fell 33, or 0.3 percent, to 9,870. Standard & Poor’s 500 index futures fell 2.80, or 0.3 percent, to 1,058.80, while Nasdaq 100 index futures declined 1.50, or 0.1 percent, to 1,706.00.
Stocks surged Thursday on the gross domestic product report, posting their best day in three months. The Dow rallied nearly 200 points, or 2.1 percent, after recording triple-digit losses in three of the four previous sessions.
The S&P rallied 2.3 percent on Thursday, while the Nasdaq jumped 1.8 percent.
Meanwhile, bond prices mostly rose Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.47 percent from 3.50 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.07 percent from 0.05 percent.
The dollar was mixed against other major currencies, while gold prices fell.
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