US futures lower with consumer spending in a funk
NEW YORK (AP) -- U.S. futures headed lower Monday as a disappointing report on retail spending hinted that consumers may once again be heading for shelter.
It was the third straight month of declines for the retail sector.
Dow Jones industrial average futures slid 44 points to 12,668. Standard & Poor's 500 futures fell 4.6 points to 1,347.10 and Nasdaq futures gave up 7.25 points to hit 2,569.75.
Largely overlooked was another strong showing from a major U.S. bank.
Able to set aside less money to cover bad debts with more people paying loans on time, Citigroup beat Wall Street estimates and posted a second-quarter net income of $2.9 billion. That comes on the heels of a good quarter for both JP Morgan Chase & Co. and Wells Fargo on Friday.
That may signal, however, that people are paying off debts and reining in spending because they are unsure about the economy.
Futures were already sinking before the retail report following weekend comments from Chinese Premier Wen Jiabao, who said his country's economy has not yet entered a recovery and "economic difficulties may continue for some time."
Some of the weakness in China comes from the debt crisis in Europe, which has crippled spending on imported goods.
Americans are cutting spending as well, as the report Monday from the Commerce Department illustrates.
Retail sales fell 0.5 percent in June from May, the report said. Consumers spent less on autos, furniture, appliances, on building and garden supplies and at department stores.
The latest figures carry a particularly heavy resonance because the last time consumer spending fell for three straight months was during the fall of 2008, at the depth of the global financial crisis.
Consumer spending drives 70 percent of economic activity and it is key to any strong economic rebound in the U.S.
The earnings season resumes in earnest this week with a raft of reports from major U.S. corporations that cover the spectrum of economic sectors. On deck Tuesday are Harley-Davidson, Coca-Cola, Goldman Sachs and Johnson & Johnson. Also reporting is Intel and Yahoo.