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Futures Move Higher as Economy Holds Line

CNBC.com
Friday, 30 May 2008 | 9:05 AM ET

Stocks future posted gains following economic numbers that showed personal spending increased in line with expectations while inflation remained in check for April.

Wall Street already had been indicating a modestly positive opening, but the 8:30 am ET reports pushed indexes higher as the market took comfort that the economy remained steady though flat.

It appeared to be another example of the market reacting to news that wasn't disastrous, even though the nearly flat growth in wages showed a sputtering economy. The upward trend in futures pointed to the continuation of a three-day post-Memorial Day average, and analysts were looking to see if May would close on a positive note.

"It's the last day of the month and you've got a lot of these indices at or near their 200-day moving averages," said Art Cashin, director of floor operations at UBS. "The S&P in fact is critical. If they can get it to close above, for argument's sake, 1,405, then they may turn the whole monthly chart around. ... The final hour's going to be watched very closely here to see if there's any gamesmanship going on to try and put them over the top."

Futures had gained earlier on momentum from Dell, which reported better-than-expected quarterly earnings and sales after the bell Thursday, citing strong demand for laptops and lower operating costs.

Shares of the hardware maker jumped more than 10 percent in premarket trading.

New York light crude futures reversed earlier losses and pushed oil above $127 a barrel.

Shortly after the start of trading the Chicago purchasing manager's index (PMI) arrives.

The measure of Midwest manufacturing activity is expected to edge up to 48.5 in May from 48.3 in April.

No change is expected in the University of Michigan's revised measure of consumer confidence, which arrives at 10 am.

On the deal front, UAL's United Airlines and US Airways have suspended merger talks, with United looking more closely at an alliance with Continental , Reuters reported.

And NBC Universal, the parent of CNBC, and Blackstone are looking to make a $1.8 billion all-stock bid for the Weather Channel, Reuters reported.

In earnings, jewelry retailer Tiffany reported a 19 percent increase in first-quarter profit, sending shares up 4.5 percent in premarket trading.

  Price   Change %Change
BX
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CPT
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4331
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USG1
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TIF
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