Stock futures point lower ahead of economic data

Wall Street appeared ready to give back some of last week's big gains Monday as investors, uneasy about the holiday shopping season, awaited some key economic reports.

Initial reports about the start of holiday shopping pointed to sales that were better than some retailers and analysts expected, but showed that consumers are extremely cautious and likely to wait for the lowest prices. Analysts are still forecasting a very difficult season.

Wall Street is well aware that without strong consumer spending, the economy will continue to languish. Any signs of further weakening in consumers' willingness to shop is likely to unnerve the market.

According to preliminary figures released by RCT ShopperTrak, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 percent to $10.6 billion on Black Friday - the day after Thanksgiving that is traditionally one of the biggest shopping days of the year. The trade group is expected to release data for the combined Friday and Saturday period on Monday.

The Dow Jones industrial average futures fell 170, or 1.93 percent, to 8,651. Standard & Poor's 500 index futures dropped 20.50, or 2.29 percent, to 874.80, while Nasdaq 100 index futures fell 25.50, or 2.15 percent, to 1,160.50.

While the market is anxious about retail sales, some stock selling was to be expected Monday considering the magnitude of last week's advance, when stocks posted some of their steepest gains in decades. The Dow has gained 16.9 percent and the S&P 500 index 19.1 percent since a rally that began Nov. 21.

It was the first five-day string of gains for both the Dow and the S&P 500 since July 2007, and the largest five-day percentage gain in at least 75 years.

Investors will be scouring more economic data on Monday for signs of an improving economy. The Institute for Supply Management, a trade group of purchasing executives, is expected to release its monthly report on manufacturing activity at 10 a.m. EST. Similar readings released earlier in China and the U.K. show that manufacturing contracted sharply in those economies in November.

At the same time, the Commerce Department is expected to report that construction spending dropped in October. Construction spending for October likely fell by 0.9 percent, according to the consensus view of economists surveyed by Thomson/Reuters.

That decline would be triple the 0.3 percent fall recorded in September.

The market will also likely be uneasy as investors await Friday's report from the Labor Department on November employment.

The financial sector was expected to remain in focus Monday. Financial stocks got a boost last week after the government stepped in to rescue Citigroup Inc. The government injected a fresh $20 billion into the banking giant and said it would guarantee up to $306 billion of the bank's risky assets. Investors have been skittish in recent weeks that financial firms will continue to post big losses following the mortgage bust.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.86 percent from 2.92 percent Friday. The yield on the three-month T-bill, considered one of the safest investments and an indicator of investor sentiment, slipped to 0.04 percent from 0.05 percent Friday. The lower the yield, the more anxious investors tend to be.

Light, sweet crude fell $2.57 to $51.86 in premarket electronic trading on the New York Mercantile Exchange.

The dollar fell against other major currencies. Gold prices also fell.

Overseas, Japan's Nikkei stock average fell 1.35 percent. In afternoon trading, Britain's FTSE 100 was down 2.56 percent, Germany's DAX index was down 2.75 percent, and France's CAC-40 was down 2.34 percent.

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(Copyright 2008 by The Associated Press. All Rights Reserved.)