US stock futures rise after consumer price data

NEW YORK (AP) -- Wall Street headed for a higher open Friday after the government said core inflation, which strips away food and energy costs, met expectations in May. Short-term Treasury debt rose after the report, which eased some investor concerns about the impact of rising prices on the economy.

The Labor Department's Consumer Price Index grew 0.6 percent last month, which was just above the 0.5 percent economists had expected. It was the biggest one-month increase since last November.

However, stripping out energy and food, the less volatile core inflation reading edged up a more moderate 0.2 percent. That raised investor hopes that consumer spending -- which accounts for more than two-thirds of the U.S. economy -- won't be hurt as much as the market has feared by record oil and gasoline prices.

Investors are also awaiting a preliminary index on consumer sentiment survey for June that is expected to show Americans remain pessimistic about the economy. The market anticipates a reading of 59.8 -- the same as last month -- according to analysts.

Dow Jones industrial average futures were up 58, or 0.23, at 12,216 after the report.

Standard & Poor's 500 index futures edged up 5.20, or 0.39 percent, to 1,348.40, while the Nasdaq 100 index futures added 11.00, or 0.57 percent, to 1,950.00.

Short-term bond prices, which have been pummeled by inflation concerns and also some positive economic signs, improved after the report. The yield on the Treasury's 2-year note was 3.01 percent, down from 3.05 late Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, dipped to 4.21 percent from 4.22 percent.

The dollar rose against other major currencies, while gold prices rose.

Oil prices fell, following a sharp rebound in the previous session. A barrel of light, sweet crude fell $1.16 to $135.58.

Wall Street rose modestly on Thursday, with the Dow up 57 points, in a volatile session that demonstrated how anxious investors are about inflation and the overall health of the economy.

In corporate news, Anheuser-Busch Cos. is holding preliminary talks with rival Grupo Modelo SAB, according to a report in The Wall Street Journal. The maker of Budweiser, Bud Light and other brands received a $46 billion offer from Belgian brewer InBev SA.

Lehman Brothers Holdings Inc. might rise on reports that Chief Executive Richard Fuld is looking for outside capital, possibly from a sovereign wealth fund or a U.S. investor. The investment bank's shares have fallen about 30 percent this week after reporting a nearly $3 billion second-quarter loss, and the company ousted its chief financial officer and chief operating officer on Thursday.

Yahoo Inc. is now turning to rival Google Inc. to help squelch a rebellion among its shareholders who believe it should have accepted Microsoft Corp.'s $47.5 billion buyout offer while it was still available last month. Late Thursday, Yahoo announced talks with Microsoft had ended with no deal.

Overseas, Japan's Nikkei 225 average closed 0.61 percent higher. In midday trading, Britain's FTSE 100 index fell 0.68 percent, Germany's DAX 30 index dropped 0.47 percent, and the French CAC-40 index dropped 0.98 percent.

(Agencies)