Futures Meander as Housing Fears Derail Rally
U.S. stocks index futures pointed to a flat open Friday as the prospect of further weakness in the housing market sideswiped investors' hopes of pushing the major indexes higher.
There is concern that stocks won't be able to escape the claws of a bear market without the foundation of a solid housing market to build on. Index futures searched for direction through the morning, with the Dow indicating a mildly lower open and the S&P 500 and the Nasdaq edging higher.
The outlook for real estate was dented Thursday when data showed existing homes sales dropped again in June. Investors will be closing watching new home sales data when it's released at 10 am New York time to see just how bad the outlook is for home prices.
"The housing market remains obviously in a very sad state, you might say a depression, which will continue at least for the next few quarters," Peter Cardillo, chief market economist from Avalon Partners Incorporated, told "Worldwide Exchange".
Adding to the gloom surrounding the sector, home foreclosure filings rose 14 percent in the second quarter, according to real estate data firm RealtyTrac.
Investors could see a relief rally if June's durable goods data, released at 8:30 am, and July's consumer sentiment data, out at 10 am, come in line with expectations, Cardillo said.
One stock set to do well was Washington Mutual, which jumped more than 8 percent in German trading after the savings-and-loan giant responded to an analyst note that said creditors are pulling funds from the company.
Meanwhile, members of Merrill Lynch's brokerage sales force might be poached by rivalMorgan Stanley as the Wall Street bank pushes on with a major recruitment drive.
And officials at Lehman Brothers have been mulling the sale of part or all of its Neuberger Berman asset management unit, sources told CNBC.