Stock futures fall ahead of opening

[February 23, 2010]  NEW YORK (AP) -- Stock futures fell Tuesday as investors remain cautious about the strength of a consumer-led economic recovery.

Overseas markets mostly fell.

Investors are sorting through another round of retailers' earnings looking for signs that consumers are returning to stores. The Conference Board releases its monthly consumer confidence report after the market opens, which will also provide clues into the psyche of shopper.

Stocks put a rally on pause Monday after retailers provided upbeat earnings, but cautioned a consumer rebound would be slow.

Consumer spending is considered vital to a strong, sustained economic recovery because their spending accounts for more than two-thirds of all economic activity.

Home Depot Inc. reported a better-than-expected quarterly profit. The home improvement retailer also increased its dividend and outlook, evidence it is confident about the strength of a recovery. Competitor Lowe's Corp. on Monday also raised its outlook, but took a cautious tone about growth saying it's likely to be modest and slow in the near future.

Ahead of the opening bell, Dow Jones industrial average futures fell 31, or 0.3 percent, to 10,343. Standard & Poor's 500 index futures fell 3.60, or 0.3 percent, to 1,103.90, while Nasdaq 100 index futures dropped 8.00, or 0.4 percent, to 1,813.00.

The Conference Board is expected to show consumer confidence fell slightly in February, after three straight months of gains. Its index likely fell to 55 from 55.9, according to economists polled by Thomson Reuters.

The reading still falls well short of what is considered strong -- a reading above 90 means the economy is on solid footing. However, the index has rallied over the past year after bottoming at 25.3 in February 2009.

Investors will also closely watch a report on home prices. The housing market helped push the country into recession. If home prices can continue to stabilize or rise, it would be a huge boost for the battered market because improving prices make homeowners feel wealthier and lead them to spend more money.

The S&P/Case-Shiller 20-city home price index is expected to show that while prices continue to fall, the annual rate of decline has slowed significantly. Economists forecast the index fell 3.2 percent in December, compared with a drop of 5.3 percent a month earlier.

The report, which measures prices in 20 of the country's largest metropolitan markets, is due out at 9:00 a.m. EST.

Stocks dipped Monday after four straight days of gains. Major indexes closed modestly lower after big consumer companies gave a cautious outlook for the economic recovery. Both Lowe's and Campbell Soup Co. reported strong earnings, their results and outlooks showed consumers are still shying away from big spending.

The Dow dipped 0.2 percent following its biggest weekly gain since early November. The S&P 500 fell 0.1 percent.

Meanwhile, bond prices rose Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.78 percent from 3.80 percent late Monday.

The dollar was mixed against other major currencies. Gold and oil were both trading in a narrow range.

Overseas, Japan's Nikkei stock average fell 0.5 percent. Britain's FTSE 100 fell less than 0.1 percent, Germany's DAX index dropped 0.6 percent, and France's CAC-40 fell 0.5 percent.

[Associated Press; By STEPHEN BERNARD]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.