US stock futures dip on consumer data, Spain woes

US stock futures fall on weak consumer spending data, worry about European banks, Spanish debt

Associated Press
US stocks lower on consumer spending worries
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FILE - In this Thursday, Sept. 20, 2012, file photo, traders check the prices to begin trading on the floor of the New York Stock Exchange. Stocks notched their first gain of the week Thursday, Sept. 27, 2012, after Spain announced severe budget cuts intended to convince the world that it can meet deficit-reduction targets. It was the best day for the U.S. market since Sept. 13, when Federal Reserve Chairman Ben Bernanke announced further steps by the central bank to speed the economic recovery. (AP Photo/Richard Drew, File)

NEW YORK (AP) -- U.S. stock futures headed down Friday, the last trading day of the quarter, as investors fretted over the economy of Spain and absorbed a disappointing report on U.S. consumer spending.

The Spanish government announced big spending cuts on Thursday aimed at convincing potential bailout creditors and investors that it has a rock-solid plan to heal its public finances. But the positive momentum generated that budget ground to a halt, as investors awaited more news, including stress test results into 14 banks due after European markets close.

The Moody's rating agency is also expected to weigh in on Spain's creditworthiness, and there are concerns the government's rating will be cut to "junk" status.

Dow Jones industrial average futures fell 63 points to 13,351. The broader Standard and Poor's 500 futures slid 6.1 points to 1,435. Nasdaq 100 futures gave up 8 points to 2,806.5.

The U.S. markets appeared poised to follow European indices down. Madrid's IBEX index traded 1.1 percent lower at 7,756. Elsewhere, Germany's DAX was 0.48 percent lower at 7,254 while the CAC-40 in France fell 1.3 percent to 3,394. The FTSE 100 index of leading British shares was 0.1 percent lower at 5,771.

A report on U.S. consumer spending didn't offer any help. Even though the Commerce Department said spending rose 0.5 percent in August — the biggest jump since February— most of the increase went for higher gas prices.

That meant less growth elsewhere for strained household budgets. Spending on items expected to last at least three years like appliances and automobiles, rose 0.3 percent. And incomes rose just 0.1 percent, reflecting weak job growth.

Earlier in Asia, stocks rose on continued speculation that China's central bank will act soon to help the world's No. 2 economy. Hong Kong's Hang Seng Index rose 0.4 percent and South Korea's Kospi added nearly 0.4 percent. But Japan's Nikkei 225 index lost 0.9 percent, sinking on a government report that showed industrial production fell further in August.

.U.S. stocks to watch include Walgreen Co., which reported a 55 percent drop in fiscal fourth-quarter profit, weighed down by big charges related to an inventory adjustment and its investment in a European retailer. Its adjusted results beat Wall Street expectations, but the stock fell 2.2 percent to $35.78 in premarket trading.

Nike Inc. shares fell 3.7 percent to $92.48 premarket, after reporting a 12 percent drop in fiscal first-quarter profit and revealing a slowdown in orders from retailers for the coming months, particularly in China.

Bank of America Corp. said it will pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch during the height of the financial crisis. The bank denied allegations it misled investors about the financial health of both companies, but said it settled to remove the issue behind it. Shares edged down 1 percent to $8.88.

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