NEW YORK – Stocks were set to open moderately lower on Friday, with investors reluctant to get too enthusiastic about economic data.
Stock futures pared their losses after the Labor Department said consumer prices in April were flat, as economists predicted. Excluding declining energy and food prices, core consumer prices edged up 0.3 percent, a bit higher than forecast.
Investors were also relieved by reports that New York-area manufacturing activity and industrial production contracted less than economists expected. They also shrank significantly less than they did earlier in the year, fitting in with the trend seen in most data since early March: that the economy continues to slide, but at a slower pace.
But investors are still awaiting a midmorning report from the University of Michigan on consumer sentiment, as well as readings next week on the housing market. After European countries reported on Friday a massive 2.5 percent contraction in the first quarter, investors remain nervous about pushing stocks higher.
Wall Street’s huge spring rally has hit a lull. The government’s stress tests of banks are done, earnings reports are winding down and the first wave of April economic data has been released. Investors are growing concerned that perhaps they got too optimistic when they saw signs of the economy bottoming.
Before the market’s opening, Dow Jones industrial average futures fell 16, or 0.2 percent, to 8,271. Standard & Poor’s 500 index futures fell 3.60, or 0.4 percent, to 885.90. Nasdaq 100 index futures fell 4.00, or 0.3 percent, to 1,349.00.
In mixed news for the market, the Treasury Department agreed to extend billions in bailout funds to six major life insurers. The move was positive because it means the insurers will get more capital, but negative because it implied that the insurers’ problems posed a serious risk to the financial system.
The Hartford Financial Services Group Inc. said it is eligible for $3.4 billion from the Troubled Asset Relief Program, or TARP, while Lincoln National Corp. said it has been initially approved for a $2.5 billion injection.
Allstate Corp., Ameriprise Financial Inc., Principal Financial Group Inc. and Prudential Financial Inc. have also been approved for funds. The capital invested in the six companies will total less than $22 billion, The Wall Street Journal reported Friday, citing a person familiar with the situation.
Meanwhile, the ailing auto industry continues to face challenges. General Motors Corp. says it will notify 1,100 U.S. dealers on Friday that their franchise agreements will not be renewed. GM said the closures — which come a day after Chrysler LLC cut ties with a quarter of its dealers — must be made as part of its government-ordered restructuring plan.
Earnings data was also troubling. Blockbuster Inc. reported late Thursday a sharp decline in first-quarter profit, sending the video rental chain’s shares tumbling about 20 percent in premarket trading.
Bond prices fell after the inflation data. The yield on the 10-year Treasury note rose to 3.11 percent from 3.09 percent late Thursday.
The dollar was mixed against other major currencies, while gold prices edged slightly lower.
Light, sweet crude fell 67 cents to $57.85 a barrel in electronic trading on the New York Mercantile Exchange.
In overseas stock trading, Japan’s Nikkei stock average rose 1.9 percent. In midday trading, Britain’s FTSE 100 was down 0.6 percent, Germany’s DAX index was down 0.6 percent, and France’s CAC-40 was down less than 0.1 percent.