By Tomi Kilgore
U.S. stock futures held slight losses, though the release of
data showing wholesale inflation declined unexpectedly.
About 55 minutes ahead of the open, Dow Jones Industrial Average
futures fell 24 points, or 0.1%, to 16654. Just before the release
of the data, Dow futures were down 20 points.
S&P 500 index futures slipped three points, or 0.2%, to 1920
and Nasdaq-100 futures eased two points, or 0.1%, to 3763. Changes
in stock futures don't always accurately predict stock moves after
the opening bell.
The producer-price index for May declined 0.2% on the month,
missing forecasts for a 0.2% rise. Excluding volatile food and
energy components, core PPI was flat, versus expectations of a 0.1%
increase.
After the open, the preliminary Thomson-Reuters/University of
Michigan consumer sentiment index for June is expected to rise to
83.0 from the final May reading of 81.9.
The yield on the 10-year Treasury note ticked up to 2.608% from
2.586% late Thursday.
The early slight losses, which followed a two-day drop of 212
points for the Dow, came as worries about an escalation of violence
in Iraq overshadowed an upbeat outlook from Dow component
Intel.
On Thursday, the Dow fell 110 points, or 0.7%, to suffer the
biggest back-to-back point and percentage decline in four weeks.
The declines set the Dow up to suffer the first weekly loss in four
weeks.
The S&P 500 fell 0.7% on Thursday to suffer a third-straight
decline, the longest losing streak since the three-day stretch
ending April 7.
With the Iraqi government girding to protect the capital from
advancing insurgents, President Barack Obama and his administration
have signaled that they are weighing possible airstrikes to lend
support.
Fears of further violence have pushed oil prices higher.
Crude-oil futures climbed 0.3% to $106.83 a barrel, after surging
2% on Thursday, the biggest one-day percentage gain in over two
months.
The yield on the 10-year Treasury note ticked up to 2.616% from
2.586% late Thursday. Yields rise and bond prices decline. Gold
futures slipped 0.1% to $1,272.30 an ounce, after settling higher
for a fourth-straight session Thursday, the longest winning streak
in three months.
Charles Sweeney, director of equity trading at JMP Securities,
said while Iraq is certainly on investors' minds, he's encouraged
by how orderly the recent declines have been. Overall volume has
remained below the year-to-date daily average for nearly four
weeks.
"I wouldn't point to any one specific thing" for the market's
recent weakness, Mr. Sweeney said. "We're not seeing a massive
derisking by any stretch, just a little profit-taking after a
month-long rally."
He said while the market could pull back a bit further over the
short term, he believes any weakness will remain relatively shallow
and short-lived. Barring a sudden slowdown in the economy, he
expects investors who have been reluctant to buy into a rising
market will be more willing to step in on dips.
"What we've seen over the past year, when you don't have any
real driving macroeconomic data to move the market lower, these
selloffs have been bought," Mr. Sweeney said.
He added that while investors are mostly positive on stocks,
"there's a general concern among institutional investors of being
too committed. There is still a good number of investors who are
hesitant to put a lot of money to work at these levels."
On the bright side, Dow component Intel ran up 6.8% in premarket
trading after the semiconductor maker raised its revenue outlook
for the current quarter and for the year late Thursday, citing
stronger-than-expected demand for business PCs.
After the open, the preliminary Thomson-Reuters/University of
Michigan consumer sentiment index for June is expected to rise to
83.0 from the final May reading of 81.9.
European markets were broadly lower as worries about Iraq and
possible rate increases in the U.K. weighed on sentiment. The Stoxx
Europe 600 shed 0.7%, and was headed for the first weekly loss in
nine weeks.
Late Thursday, Bank of England Governor Mark Carney said
interest rates in the U.K. could rise sooner than the market is
anticipating, as economic growth has been stronger than the central
bank expected.
The U.K.'s FTSE 100 index dropped 1.1%. Elsewhere, Germany's DAX
30 lost 0.8% and France's CAC 40 gave up 0.8%. The dollar fell
against the U.K. pound, but edged higher against the euro and the
yen.
Asian markets showed some strength, with China's Shanghai
Composite rising 0.9% after data showing bank lending surged in
May. Japan's Nikkei Stock Average climbed 0.8%.
In other corporate news, Finisar Corp. tumbled 21% after the
fiber optics components maker reported late Thursday fiscal
fourth-quarter adjusted profit that missed estimates, and provided
a disappointing outlook for the current quarter.
Express surged 25% after private-equity firm Sycamore Partners
reported a 9.9% stake in the retailer and said it was interested in
looking into a possible buyout.
Write to Tomi Kilgore at tomi.kilgore@wsj.com