Stock futures point to modestly lower open

[November 17, 2009]  NEW YORK (AP) -- Stock futures are pointing to a modestly lower opening Tuesday as investors sort through another round of economic data and retail earnings.

Overseas markets retreated slightly after big gains the previous day.

Investors are examining earnings from large retailers, looking for signs of strength in consumers. A report showing a sharp rebound in retail sales helped push major indexes higher on Monday.

Consumer spending accounts for about 70 percent of all economic activity in the nation, and a return of shoppers -- especially during the holiday season -- is considered necessary for a strong economic recovery.

Home Depot Inc. said earnings and sales fell during the most recent quarter, but beat analysts' expectations. The nation's largest home improvement retailer also said it is seeing signs of stabilization in the housing market, which has been hammered in recent years.

Target Corp. and TJX Cos., the parent of retailer TJ Maxx, are both due to report earnings later Tuesday.

Aside from earnings, traders are awaiting a report on industrial production for glimpses of recovery in the manufacturing sector. The Federal Reserve is expected to say production at the nation's factories, mines and utilities rose for the fourth straight month, increasing 0.4 percent in October, according to economists polled by Thomson Reuters.

The report is due out Tuesday at 9:15 a.m. EST.

Ahead of the opening bell, Dow Jones industrial average futures fell 5, or 0.1 percent, to 10,363. Standard & Poor's 500 index futures declined 0.90, or 0.1 percent, to 1,105.40, while Nasdaq 100 index futures fell 2.00, or 0.1 percent, to 1801.50.

Inflation data is also due out Tuesday. The Labor Department's Producer Price Index, which measures inflation at the wholesale level, is expected to increase 0.5 percent in October because of rising energy prices. Excluding volatile energy and food prices, the index likely rose just 0.1 percent.

The report is due out at 8:30 a.m. EST.

It is widely expected inflation will remain in check -- a sentiment reiterated by Fed chairman Ben Bernanke on Monday -- as rising unemployment, wary shoppers and tight credit keep a lid on prices.

A bigger-than-expected rebound in retail sales in October helped push stocks sharply higher Monday, sending major indexes to their 13-month highs. The Dow jumped 136 points and the S&P closed above the 1,100 level for the first time in more than a year.

Retail sales rose 1.4 percent in October, nearly double the 0.8 percent increase forecast by economists and a sharp rebound from the 2.3 percent decline in September.

A weakening dollar on Monday also sent the price of commodities and materials and energy companies' stock higher. Stocks have frequently been moving in the opposite direction of the dollar during the latest part of the market's rally.

On Tuesday, the dollar mostly rose against other major currencies, while the price of gold declined after setting a record high a day earlier.

Bond prices declined modestly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.36 percent from 3.34 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.07 percent from 0.05 percent.

Overseas, Japan's Nikkei stock average fell 0.6 percent. In afternoon trading, Britain's FTSE 100 fell 0.3 percent, Germany's DAX index declined 0.3 percent, and France's CAC-40 fell 0.4 percent.

[Associated Press; By STEPHEN BERNARD]

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