Wall Street was set to open lower on Friday as commodity prices eased and investors looked ahead to key consumer confidence data for insight into prospects for the recession easing.
U.S. crude oil futures fell nearly 2 percent, helped by a stronger U.S. dollar, after a three-day rally lifted the price over $72 per barrel. Gold prices edged lower in Europe.
Shares in natural resource companies headed lower, with Freeport-McMoRan Copper & Gold Inc
A rally this week in commodity prices helped underpin stock prices, but some investors say much higher prices could hurt an economic recovery by increasing costs to consumers and businesses.
Commodity prices coming off here will certainly impact the market as it's been commodity prices that have basically helped pushed the market toward these new 12-month highs, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. So weakness there would be a potential problem.
S&P 500 futures fell 2.90 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones Industrial Average futures dropped 15 points, while Nasdaq 100 futures were off 1.75 points.
U.S. Treasuries rose Friday, extending the previous session's gains after a solid auction of 30-year bonds on Thursday soothed worries about demand for massive government debt.
The prospect of rising interest rates has worried stocks investors concerned about the effect of increased borrowing costs on an economic recovery. Yields on the 10-year treasury note briefly passed 4 percent earlier in the week but by Friday yields had fallen back toward 3.8 percent.
The Reuters/University of Michigan index of consumer sentiment, due at 9:55 a.m. EDT, will be closely watched as consumers account for two-thirds of economic activity.
June's reading is forecast to rise to 69.5 from 68.7 in May, a Reuters poll showed, indicating growing consumer confidence.
In one bright economic spot, Chinese factory output surged in May and improved Japanese output in April fueled hopes on Friday that Asia can lead a global recovery, though a record drop in euro zone industrial production showed much of Europe lagging.
In a further sign the battered financial system is returning to health, BlackRock Inc
Chip designer Rambus Inc
U.S. stocks racked up gains across a wide array of sectors on Thursday, aided by rising commodity prices and jobless data that showed improving labor market conditions.
(Writing by Edward Krudy; editing by Jeffrey Benkoe)