Stock futures narrowly mixed ahead of consumer data

[June 13, 2008]  NEW YORK (AP) -- Stock futures were narrowly mixed Friday ahead of key data on inflation and consumer sentiment. Government bond prices extended their slump, driving yields on the 10-year Treasury to new highs for the year.

First up for the market will be the Labor Department's Consumer Price Index at 8:30 a.m. EDT, followed by the University of Michigan's report on consumer sentiment shortly before 10 a.m. Both reports will be an important gauge of inflation's impact on consumer spending, which accounts for more than two-thirds of the economy; Wall Street has become more focused on consumer activity in recent weeks, especially with prices for oil and gasoline soaring.

The CPI report is expected to show that consumer prices in May rose at a faster rate than the prior month due mainly to surging energy costs. The data is used as the government's primary inflation yardstick, and is forecast to show a 0.5 percent gain from April, according to economists surveyed by Thomson/IFR.

Meanwhile, the consumer sentiment survey for June is expected to show that Americans remain pessimistic about the economy as gas and food prices continue to rise. The market anticipates a reading of 59.8 -- the same as last month -- according to analysts.

Ahead of the consumer price report, Dow Jones industrial average futures were up 2, less than 0.01 percent, at 12,160. Standard & Poor's 500 index futures edged up 0.90, or 0.07 percent, to 1,344.10, while the Nasdaq 100 index futures fell 4.50, or 0.23 percent, to 1,934.50.

Bond prices, which have been pummeled by inflation concerns and also some positive economic signs, fell again ahead of the market's open. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was at 4.24 percent, up from 4.22 percent on Thursday, moving to a new high for 2007.

The dollar rose against other major currencies, while gold prices rose.

Oil prices held steady above $136 a barrel Friday after a sharp rebound the previous session as traders said supply worries would likely continue to drive the market higher. A barrel of light, sweet crude fell $1.28 to $135.47.

Wall Street rose modestly on Thursday, with the Dow up 57 points, in a volatile session that demonstrated how anxious investors are about inflation and the overall health of the economy.

In corporate news, Anheuser-Busch Cos. is holding preliminary talks with rival Grupo Modelo SAB, according to a report in The Wall Street Journal. The maker of Budweiser, Bud Light and other brands received a $46 billion offer from Belgian brewer InBev SA.

Lehman Brothers Holdings Inc. might rise on reports that Chief Executive Richard Fuld is looking for outside capital, possibly from a sovereign wealth fund or a U.S. investor. The investment bank's shares have fallen about 30 percent this week after reporting a nearly $3 billion second-quarter loss, and the company ousted its chief financial officer and chief operating officer on Thursday.

Yahoo Inc. is now turning to rival Google Inc. to help squelch a rebellion among its shareholders who believe it should have accepted Microsoft Corp.'s $47.5 billion buyout offer while it was still available last month. Late Thursday, Yahoo announced talks with Microsoft had ended with no deal.

Overseas, Japan's Nikkei 225 average closed 0.61 percent higher. In midday trading, Britain's FTSE 100 index fell 0.51 percent, Germany's DAX 30 index dropped 0.42 percent, and the French CAC-40 index dropped 0.68 percent.

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On the Net:

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[Associated Press; By JOE BEL BRUNO]

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