Stock futures little changed ahead of open

[August 14, 2009]  NEW YORK (AP) -- Stock futures were trading in a narrow range as investors await new insight into a potential economic recovery. Investors will get reports on inflation, industrial production and consumer confidence Friday morning.

Overseas, Asian markets were mostly higher, with Japan's main index hitting a ten-month high amid mounting optimism about a global economic recovery. European markets were narrowly mixed.

The strength of the consumer will again be a focus Friday as Reuters/University of Michigan index of consumer sentiment is released for August, a day after data showed an unexpected drop in consumer spending. Economists polled by Thomson Reuters expect a preliminary reading on consumer sentiment of 68.5, higher than July's final reading of 66.0. The report is due out at 9:55 a.m. EDT.

Upbeat consumers are considered vital to any economic turnaround. Consumer spending accounts for more than two-thirds of all economic activity. On Thursday, the Commerce Department said consumer spending unexpectedly fell in July, which helped put a damper of optimism for a recovery following the Federal Reserve's comments Wednesday afternoon that the economy was stabilizing.

The cost of goods at the retail level will also be released Friday. The Labor Department is expected to say the consumer price index, a key measure of inflation, was flat in July after a 0.7 percent increase in June.

The core inflation rate, which excludes volatile energy and food prices, is expected to rise 0.1 percent in July.

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

Inflation could eventually become a concern down the road as the government continues to spend in an effort to stimulate the economy, though in the near term there has been little worry. A rapid increase in inflation would likely lead to higher interest rates, which could stifle any economic turnaround.

Ahead of the opening bell, Dow Jones industrial average futures fell 16, or 0.2 percent, to 9,3723. Standard & Poor's 500 index futures declined 1.40, or 0.1 percent, to 1,012.10, while Nasdaq 100 index futures declined 4.00, or 0.3 percent, to 1,627.75.

A third report will also provide insight into potential recovery. The Federal Reserve is expected to report that production at the nation's factories, mines and utilities grew 0.3 percent last month. It would be the first increase in nine months, a sign the recession is easing.

Traders shook off disappointing economic reports Thursday about retail sales and job losses to send major indexes modestly higher.

Meanwhile, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.59 percent from 3.62 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.17 percent from 0.16 percent late Thursday.

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

Overseas, Japan's Nikkei stock average rose 0.8 percent. In afternoon trading, Britain's FTSE 100 was rose 0.1 percent, Germany's DAX index fell less than 0.1 percent, and France's CAC-40 rose 0.4 percent.

[Associated Press; By STEPHEN BERNARD]

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