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Futures Gain Slightly After Retail Sales, PPI

Stock index futures rose slightly after news retail sales were stronger than expected in November, and inflation was slightly higher than expected. Earlier, futures had slipped after disappointing news from leading electronics retailer Best Buy dampened enthusiasm for the holiday shopping season.

Retail sales rose 0.8 percent in November, and 1.2 percent not including auto sales, the Commerce Department said Tuesday. Economists surveyed by Reuters had expected retail sales to rise 0.6 percent in November. October retail sales were revised up 1.7 percent from a previously reported 1.2 percent rise. Sales were up 7.7 percent from November last year.

Producer prices, meanwhile, rose 0.8 percent in November, more than expected as energy prices soared, according to the Labor Department. Core PPI, which excludes food and energy costs, rose 0.3 percent, slightly above an expected 0.2 percent rise.

The retail sales news may ease some concerns raised earlier by Best Buy, which reported a decline in quarterly earnings and a reduced full-year outlook. Best Buy shares fell more than 10 percent in premarket trading.

The retail sales data did show that electronics sales fell 0.6 percent in November.

Futures earlier were positive but with investors hesitant to put a lot of money to work until the Federal Open Market Committee weighs in on its program of bond buying later in the day. No change in interest rates is expected.

Any more insight into the Fed's plan to buy $600 billion in Treasury securities will be closely watched, but economists say it's unlikely Fed Chairman Ben Bernanke and company will waver from the current program.

Confidence among U.S. small business owners continued to rise, reaching a three-year high last month, according to the National Federation of Independent Business. An optimism index put out by the group rose 1.5 points to 93.2, the highest reading since December 2007.

At 10 a.m., the latest numbers on business inventories will be released.

Looking to stocks, shares of Yahoo fell nearly 2 percent before hours after news the Internet site plans to lay off more than 600 employeesas soon as Tuesday. The cuts will come mostly from the product group, Reuters reported.

Amgen rose after the biotech firm reported successful resultsfor Xgeva, a drug to prevent bone complications in prostate cancer patients. The U.S. Food and Drug Administration to approve Xgeva on Nov. 18, 2010.

Pfizer named George Lorch as its chairman and also raised its dividend more than 10 percent.

The Carlyle Group's HCR ManorCare sold most of its real estate assets to HCP , a health care real estate investment trust in a $6.1 billion sale and leaseback deal, according to Reuters. Carlyle and ManorCare's management will remain as owners of the operating company.

In global markets, European stocks were mixed in midday trading, while the major markets in Asia finished higher.

On Tap This Week:

TUESDAY: Business inventories, FOMC meeting announcement.
WEDNESDAY: CPI, credit card default rates, MBA mortgage applications, New York manufacturing survey, industrial production, housing market index, oil inventories; Honeywell's 2011 outlook and Atlanta Fed Pres Lockhart speaks.
THURSDAY: Housing starts, jobless claims, Philadelphia Fed survey; before-the-bell earnings from FedEx, General Mills; after-the-bell earnings from Oracle, Accenture, Research In Motion, and Take-Two.
FRIDAY: Leading indicators, quadruple witching.

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