US stock futures dip on weak consumer spending

US stock market futures dip as consumer spending growth slows, new Spanish economic worries

Associated Press
Dow, S&P 500 slip as Spain enters recession
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Specialists Peter Giacchi, left, and John Parisi confer on the floor of the New York Stock Exchange Wednesday, April 25, 2012. U.S. stocks were headed for a neutral opening, with Dow Jones industrial futures nearly unchanged. (AP Photo/Richard Drew)

NEW YORK (AP) -- U.S. stock market futures slipped Monday as consumer spending growth slowed last month and Spain officially slipped back into recession.

Dow Jones industrial average futures fell 0.17 percent to 13,142. Standard & Poor's 500 futures gave up 0.25 percent to 1,395, and Nasdaq 100 futures slipped 0.36 percent to 2,727.

The Commerce Department reported that spending growth slowed in March, while incomes rose 0.4 percent, slightly ahead of expectations.

Recent economic reports are generating concern that the recovery is slowing down. Since consumer spending makes up about 70 percent of the economy, a cutback in the rate of spending growth could be reflecting weak income gains and a slowing job market.

Problems in Europe aren't helping.

European markets were mainly lower, weighed down by growing concerns over Spain. Data released Monday confirmed that Spain slipped back into recession in the first quarter. A new recession could make it harder for the government to cut its budget deficit, and raises the worry that the country might be locked into a downward financial spiral.

Ratings agency Standard & Poor's on Friday downgraded Spain to just three notches above junk, following up the move on Monday by lowering its rating for 11 Spanish banks, which are loaded with bad debt from a collapsed housing market. Spain is the fourth-largest economy in the eurozone. There is worry that the continent's bailout funds won't be big enough to rescue Spain if it needs assistance.

Germany's DAX was off 0.22 percent at 6,786. France's CAC 40 was down 1.06 percent at 3,231. Britain's FTSE 100, which often trades contrary to the rest of European markets, edged up 0.49 percent at 5,777.

Trading in Asia was light because of holidays in Japan and mainland China. Hong Kong's Hang Seng rose 1.7 percent to 21,094.21, South Korea's Kospi added 0.3 percent to 1,981.99 and Australia's S&P/ASX 200 gained 0.8 percent to 4,396.60.

Investors in those markets focused on the U.S. economy and hopes that the Fed might sanction another round of bond-buying, known as quantitative easing, after figures last Friday showed the world's largest economy grew less than expected in the first quarter.

U.S. stocks to watch include Barnes & Noble Inc. and Microsoft Corp., which are teaming to create a unit to house the digital and college businesses of the bookseller and include a Nook application for Windows 8. The companies said Monday that they may separate those businesses entirely. That could mean a stock offering, sale, or other deal could happen.

Barnes & Noble shares shot up more than 9 percent to $25.95 in premarket trading. Microsoft added 6 cents to $32.04.

Shares of health insurer Humana Inc. fell more than 4 percent to $84 after reporting a 21 percent drop in first-quarter profit, falling short of Wall Street expectations.

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