US stocks seen lower as budget fight weighs
U.S. stock index futures dipped Friday as mounting concerns of a potential government shutdown weighed on global markets.
On the economic front, household spending ticked up 0.3 percent in August, according to the Commerce Department.
The consumer sentiment index will be reported at 9:55 am ET.
Budget spending must be agreed by Congress before October 1, next Tuesday, to prevent a government shutdown which could involve federal employees facing unpaid temporary leave and a delay in the payment of military personnel. Most analysts expect a deal to be reached, even if it is at the last minute, since lawmakers are unlikely to want to risk any fallout at the 2014 Congressional elections.
The Senate will vote on Friday on a stop-gap spending bill which will exclude the healthcare defunding provision that was passed in the House of Representatives, which will essentially mean the bill going back to the House in its changed format for further consideration.
"A shutdown of a few days would probably have little impact (although perhaps no non-farm payrolls report next Friday!) but of course the longer the shutdown the more negative it becomes. For sure, the uncertainty and the debt ceiling aspect is probably already causing delays to business decisions. Given the perception in the U.S. that the Republicans are more to blame for congressional gridlock we expect them to blink first," said Bank of Tokyo-Mitsubishi's Derek Halpenny in a research note.
The pullback came after gains in the U.S. overnight. Major benchmarks managed to snap a five-day losing streak, with sentiment boosted by positive economic data and reassurances from Republicans that they would not cause the government to shut down over the debt battle.
Meanwhile, the debt ceiling must also be extended to allow the Treasury to continue borrowing money and honor its debt repayments.
Reuters reported on Wednesday that Senior Republican Jeff Sessions said there would be no shutdown or government default. House speaker John Boehner said a Republican proposal was coming that would tie federal government spending cuts to a U.S. debt limit increase.
(Read more: Brawl in US Congress—should the world care?)
BlackBerry posted a quarterly loss of nearly $1 billion, as previously warned, which included a writedown for unsold Z10 smartphones, the company's latest device that the firm had hoped would reverse its struggling business. Earlier this week, BlackBerry signed a tentative $9-a-share agreement to be acquired by a consortium led by Fairfax Financial, its largest shareholder.
(Read more: Canada's Harper suggests BlackBerry deal review)
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
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