Dell Pressures Futures, Gustav Boosts Oil
Stock index futures indicated a lower open on Friday, with weakness in the tech sector and a gain in energy prices, but trading will likely be volatile with thin volume ahead of the long weekend.
Light, sweet crude rose nearly $3 a barrel, topping $118 a barrel, as Tropical Storm Gustav threatened supplies in the Gulf Coast.
Dell put pressure on the tech sector after releasing disappointing quarterly numbers after the bell Thursday. Dell's comment that spending cutbacks on information technology have spread from the U.S. to Western Europe and Asia rippled through the sector.
Chip makers also were also under pressure after chip maker Marvell Technology delivered a tepid outlook for the third quarter. Marvell chips are used in Apple's iPhone and Research In Motion's BlackBerry devices.
The market was all abuzz about Lehman Brothers , with analysts noting that a long, three-day weekend would be a perfect time for a buyer to sweep in and take over Lehman.
Investors will also closely be watching Freddie Mac and Fannie Mae for any developments.
In economic news, personal income fell 0.7 percent, the Commerce Department reported, when economists had expected it to be flat. Spending ticked up 0.2 percent, as expected. The personal-consumption-expenditures index, a gauge of inflation, rose 4.5 percent, the steepest since February 1991. Excluding volatile food and energy costs, the core PCE rose 2.4 percent, the biggest jump since February 2007.
Due out later in the morning is the Chicago Purchasing Manager's measure of Midwest manufacturing activity at 9:45 am, with economists looking for a small drop to 50 for August. At 10 am is the University of Michigan's final reading on August consumer sentiment, with little change expected from the initial measure of 61.7.
Asian markets rallied, with Japan up more than 2 percent, led by industrial companies and exporters. But European shares failed to find direction, with weakness in banks and pharmaceutical companies offsetting strength in the retail sector.
U.S. markets will be closed for trading on Monday for Labor Day and the bond market will close early at 2 pm New York time Friday.
MONDAY-THURSDAY: Democratic National Convention in Denver
FRIDAY: Personal income and spending; Chicago manuf. report; consumer sentiment; farm prices
WATCHERS: McCain VP announcement
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