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Futures Flat After Consumer Spending News

Futures turned flat Monday following news that personal income gained slightly in May, while spending was unchanged. Gains were also limited as investors remained cautious about Greece's future.

The Greek parliament was debating a fresh austerity package but the government is fragile and analysts fear that it may not pass.

Consumer spending was largely unchanged in May for the first time in almost a year, according to the Commerce Department. The flat reading in consumer spending came after 10 straight months of gains and followed a downwardly revised 0.3 percent gain in April. Economists had expected spending to gain 0.1 percent, according to a Reuters poll.

When adjusted for inflation, spending fell 0.1 percent in May, declining for a second straight month. Spending on durable goods fell 1.5 percent after being flat in April.

Meanwhile, regulators proposed higher tier one capital ratios for big and systemically important banks over the weekend.

Rochdale Securities vice president for equity research Dick Bove wrote in a market note that the new proposals, if enacted, might trigger a global recession as banks would cut down on lending even more.

In a separate note, Bove said BofA stock is "massively undervalued."

Rivals Citigroup , GoldmanSachs and Morgan Stanley were trading flat. The sector has been the worst performer in 2011.

The Bank for International Settlements said interest rates must rise in order to fight global inflation and that delays in cutting budget deficits may make the sovereign crisis even worse.

President Obama is due to meet Senate leaders to discuss about raising the U.S. debt ceiling, with an August 2 deadline approaching.

LDK Solar jumped after the Chinese solar company said it plans to buy back up to $100 million of its undervalued American Depository shares (ADSs).

Disney gained even after Nomura cut its price target on the media conglomerate to $45 from $47.

Target slipped after Janney Capital cut its rating on the retailer to "neutral" from "buy."

And in earnings, Nike will report results after the bell.

The government is slated to auction $35 billion in 2-year notes at 1pm ET. Auctions of 5-year notes and 7-year notes are expected Tuesday and Wednesday, respectively.

European shares edged higher, after falling for eight straight weeks, with beaten-down banks ticking up and some strategists saying the worst-case scenario for heavily-indebted Greece is already priced in.

On Tap This Week:

MONDAY: Fed's Kocherlakota speaks, Fed's Hoenig speaks, 2-yr note auction; Earnings from Nike
TUESDAY: S&P Case-Shiller home price index, consumer confidence, 5-yr note auction, IMF board to select new chief
WEDNESDAY: Weekly mortgage apps, pending home sales index, oil inventories, 7-yr note auction, farm prices, Dell analyst meeting, Fed meeting on card fees; Earnings from Family Dollar, General Mills, KB Home, Monsanto
THURSDAY: Weekly jobless claims, Fed's Bullard speaks, Chicago PMI, End of QE2, Marathon Oil split takes place
FRIDAY: Consumer sentiment, ISM mfg index, construction spending, Biden's deadline for deficit plan, HP launches TouchPad, auto sales

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