US stocks head for higher open

NEW YORK - U.S. stock futures rose but came off their highs Friday after a government report confirmed personal spending fell in February to its weakest level in 17 months.

The Commerce Department's report showed consumer spending rose by 0.1 percent last month, in line with Wall Street's expectations. But word that personal incomes rose by 0.5 percent in February came as a surprise. Wall Street was looking for a 0.3 percent rise.

Investors appeared somewhat cheered after the report showed that an important inflation gauge that is tied to consumer spending rose only 0.1 percent when excluding often-volatile energy and food costs. The reading, the Federal Reserve's preferred measure of inflation, is up 2 percent over the past 12 months. With so-called core inflation back within the Fed's target of 1 percent to 2 percent it could be easier for the central bank to justify further interest rate cuts without fear of adding too much money to the economy and driving up prices.

Dow Jones industrial average futures rose 12, or 0.10 percent, to 12,333. Standard & Poor's 500 index futures rose 4.90, or 0.37 percent, to 1,334.70, and the Nasdaq 100 index futures rose 9.00, or 0.50 percent, to 1,801.00.

Stocks declined for a second day Thursday, with the Dow falling 120 points, as investors found little reason to continue a big rally that started the week; a government report confirmed a big economic slowdown in the fourth quarter.

Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, stood at 3.52 percent, flat with late Thursday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 85 cents to $106.73 in premarket electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average rose 1.71 percent. In morning trading, Britain's FTSE 100 fell 0.19 percent, Germany's DAX index advanced 0.01 percent, and France's CAC-40 slipped 0.66 percent.

(Agencies)