Futures Hold Lower After Spending News

Stock index futures pointed to a weaker open for Wall Street Friday as investors remained skeptical over the euro zone debt deal reached on Wednesday and its ability to contain the crisis that has swept across the region.

Futures held at negative levels following economic reports showing that personal income grew just 0.1 percent in September but consumers increased spending by 0.6 percent, a seemingly unsustainable trend that calls into question whether the 2.5 percent growth in the third quarter was an aberration.

In earnings news, Dow component Chevron, the second-largest U.S. oil company, is expected to show a sharp increase in profit on Friday boosted by a $500 million gain on the sale of its Welsh refinery and British and Irish marketing assets.

Profit is expected to jump to $3.46 per share from $1.87 per share, according to Thomson Reuters.

Fellow Dow component Merck reported earnings of 94 cents a share, better than consensus estimates by three cents and good enough to send shares up 1.4 percent in premarket trading.

Strategists, though, worried that market enthusiasm has become overdone and stocks are due for a pullback, if only a temporary consolidation.

The market "is currently at overbought levels that are seen once a decade, much less once a year, and it’s due for at least a pause at current levels," analysts at Bespoke Investment Group wrote in a note to clients, adding that "we can continue higher and get back to new bull market highs in the coming months, but at least in the short-term we’re due for a pullback."

The Standard & Poor's 500 currently has 94 percent of its stocks trading above their 50-day moving averages, including all 81 financial stocks.

However, portfolio manager risk aversion over the past three months of market turmoil could put a floor on any stock market drop.

"Now everyone everywhere is under-exposed to risk and to equities and is scrambling to get aboard," Dennis Gartman, hedge fund manager and author of The Gartman Letter, wrote this morning. "The size of the under-exposure is enormous, and although we cannot quantify that under-exposure we know it is there."

Enthusiasm for the European Union debt deal, which pushed the market up 3 percent in Thursday trading, also seemed to wane a bit. Fresh reminders that difficult times are ahead came in the form of an Italian bond auction that produced a yield of 6.06 percent for 10-year debt, the highest ever since Italy joined the European Union.

In other corporate news, HP dropped plans to spin off its PC unit and Samsung has overtaken Apple in terms of smartphone sales and expects the fourth quarter to be even stronger.

Troubles continued to add up for MF Global , with a Moody's downgrade the latest issue to confront the battered brokerage run by former New Jersey Gov. Jon Corzine. Shares tumbled more than 26 percent in premarket trading after falling nearly 16 percent Thursday.

Elsewhere, gold prices moderated a bit after rising more than $100 an ounce in the past month. Bond prices edged higher, with the benchmark 10-year Treasury note yield edging lower to 2.38 percent, while the US dollar was up 0.25 against the world's currencies.

Economic reports due on Friday include September personal income and spending at 8.30 am New York time.

The Labor Department issues the Employment Cost Index for the third quarter at 8.30 am and the final report on October consumer sentiment is out at 9.55 am.