Stock futures mostly dip before Bernanke's speech

[October 15, 2010]  NEW YORK (AP) -- Stock futures mostly slipped Friday as traders anxiously prepared for a key speech from Federal Reserve chairman Ben Bernanke and a handful of economic reports.

Nasdaq 100 futures got a modest lift from strong Google Inc. quarterly results. The Internet search giant's shares surged in pre-opening trading after it reported a 32-percent jump in profit.

Bernanke's speech will be closely watched because investors are looking for any further clues on the central bank's plans to stimulate the economy by buying Treasury bonds. It is assumed the Fed will announce a concrete program after its next meeting wraps up on Nov. 3. But what is not known is how much the bank will spend buying bonds or when those purchases would take place.

At the same time Bernanke is speaking, reports on inflation, retail sales and regional manufacturing will be released. A report on consumer sentiment is due out later in the morning.

The economy remains sluggish, particularly because consumers are not spending much money with unemployment still high. The Fed's move would be aimed at lowering interest rates to spark borrowing and spending by consumers and companies. That, in turn, could lead to new jobs.

Economists polled by Thomson Reuters predict retail sales rose 0.4 percent last month, which would match August's growth.

Inflation at the consumer level likely rose 0.2 percent in September. Excluding food and energy costs, economists predict prices rose 0.1 percent.

The Fed's bond-buying program would also attempt to increase inflation to more historical levels. If there is more borrowing and more spending, prices would naturally rise. Some inflation would help the dollar, which has been plummeting in recent weeks.

An October reading on manufacturing in New York is expected to show expansion is accelerating. Traders have been more closely watching such regional reports because they are a real-time snapshot of how strong manufacturing activity is around the country. Manufacturing has been among the most productive sectors of the economy this year, but growth has slowed down in recent months.

Ahead of the opening bell, Dow Jones industrial average futures fell 15, or 0.1 percent, to 11,037. Standard & Poor's 500 index futures fell 2.00, or 0.2 percent, to 1,171.50, while Nasdaq 100 index futures rose 1.50, or 0.1 percent, to 2,063.50.

Google shares jumped $47.32, or 8.8 percent, to $588.25.

Meanwhile, bond prices resumed their climb, driving interest rates lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.49 percent from 2.51 percent late Thursday. Yields have regularly been falling in anticipation the Fed will start buying more Treasury bonds.

[Associated Press; By STEPHEN BERNARD]

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