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Stocks Set for Flat Open; Data in Focus
Fri May 28, 2004 08:05 AM ET
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Stocks Up As Oil Dips


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By Rachel Cohen
NEW YORK (Reuters) - U.S. stocks were poised for a flat open on Friday after six days of gains by the Standard & Poor's 500 index as investors awaited key reports on personal spending and manufacturing activity.

Novellus Systems Inc. (NVLS.O: Quote, Profile, Research) , the maker of semiconductor equipment, will also be in focus after it raised its second-quarter revenue and profit target, citing strength in Japan, Korea and the United States.

Oil prices rose on Friday even after an OPEC source said the Organization of the Petroleum Exporting Countries may lift quota restrictions on output. Oil has retreated from a peak of $41.85 a barrel as OPEC prepares to consider a increase in output at a meeting in Beirut on June 3.

U.S. crude futures were up 18 cents to $39.62 in electronic trading on Friday.

Economic data will be key as reports provide a look at personal income and spending, manufacturing and consumer sentiment.

Figures on personal consumption are expected at 8:30 a.m. They are likely to show shoppers took a pause in April, but more important will be what they reveal about rising prices.

Economists polled by Reuters expect personal income rose by 0.5 percent in April versus March's 0.4 percent increase. Spending is expected to rise by 0.3 percent, slightly down from March's 0.4 percent increase.

"I think the income number today will be important because we need to see a continuation of strong income growth," said Peter Boockvar, equity strategist at Miller Tabak & Co.

"Everyone is focused on what impact this could have on consumers, forgetting that we're in an economy that is generating jobs and higher income growth and that will help cushion, at least, the price of oil."

Equity index futures signaled a flat to lower open. Standard & Poor's 500 stock index futures for June ticked down 2.90 points, while Dow industrials futures 27 slipped points. Nasdaq 100 futures for the same month lost 4 points.

At 9 a.m. (1300 GMT) the National Association of Purchasing Management-New York releases its May index of manufacturing activity in the region.

http://www.reuters.com