U.S. stock index futures are lower after the government reported consumer spending rose at the strongest pace in four months, Hewlett-Packard announced a stock buyback, and as investors digested merger and acquisition news.
The Commerce Department said consumer spending rose 0.4 percentafter being flat in June, and better than a 0.3 percent rise estimated by analysts polled by Reuters. Personal incomes rose 0.2 percent in July.
In corporate news, Hewlett Packard's shares were rising in pre-market trading as the company's board announced plans to buy back $3 billion in stock in the fourth quarter.
In merger news, the board at Genzyme unanimously rejected an $18.5 billion offer that translated into $69 per sharefrom Sanofi-Aventis. U.S.-traded shares of Genzyme rose more than 4 percent in premarket trading, while Sanofi shares were up about 0.7 percent.
The major indexes ended the previous week with a rally after the Federal Reserve signaled it was ready to support the recovery with monetary policy.
Even with Friday's rally, the Dow Jones Industrial Average, S&P 500, and Nasdaq look set to see their first losing month of August since 2005.
Elsewhere on the merger and acquisition front, Intel will buy the wireless unit of German chipmakerInfineon for $1.4 billion in cash. The unit will be operated as a standalone business.
BHP Billiton continues to pursue Potash , with the company telling analysts it would consider divesting several Potash units if its bid succeeds. According to Reuters, the nitrogen and phosphates businesses are the units under consideration for possible sale, valued in total at about $12 billion.
The Justice Department approved the merger between UAL's United Airlines and Continental Airlines , paving the way for the deal to close by Oct. 1. The two won approval by agreeing to less slots at New Jersey's Newark Liberty Airport to Southwest Airlines .
But the department has some concerns with Comast's bid to buy control of General Electric's NBC Universal division over how the merger may affect the Internet TV market, according to the Wall Street Journal. (CNBC.com is a unit of NBC Universal.)
In other news, Walt Disney and Time Warner said they're making progress in a dispute that could result in Disney's ABC-TV and ESPN channels being blacked out on Time Warner cable systems, though the two sides now expect to reach a deal without such an occurrence.
European shares were higher in the wake of the positive Wall Street close, with oil-related shares gaining. Asian markets closer higher, also boosted by the U.S. performance. The Bank of Japan decided to boost its cheap loan program to fight the recent surge in the yen.
- Peter Schacknow, Senior Producer, CNBC Breaking News Desk, contributed to this report.