No solace for stocks

NEW YORK (CNNMoney.com) -- Stocks pointed to a narrowly weaker open Friday despite a tame inflation reading as investors awaited a host of economic reports.

At 8:52 a.m. ET, stock futures had moved off their lows but still suggested a negative start for Wall Street.

Personal income rose less than expected in August, while spending climbed more than originally forecast, the Commerce Department reported.

But the so-called core PCE deflator, a favored measure of inflation by the Federal Reserve, rose by 1.8 percent on an annual basis, well within the central bank's comfort range.

Treasurys slipped on the news, lifting the yield on the 10-year note to 4.54 percent, down from 4.57 late Thursday.

Investors have worried lately that the Fed may not keep lowering rates if inflation flares up.

Wall Street will also take in a number of readings on the health of the economy, including the consumer sentiment index from the University of Michigan, along with a reading on construction spending and the Chicago PMI, a regional manufacturing report. The reports are due out after the opening bell.

Investors have cheered weak economic reports lately, taking them to be a sign that the Fed will keep lowering rates to juice growth. But signs of a significant slowing in the economy - especially a pullback among consumers - could raise recession fears and dampen sentiment.

David Kelly, economic adviser for Putnam Investments, said he thinks that investors are already looking past Friday's economic numbers to the September employment report due Oct. 5, and that is the biggest overhang on futures.

The August report showed the first decline in U.S. payrolls in four years, and while economists are now forecasting a gain of 100,000 jobs in September, Kelly said there could be another unexpected decline in this report.

"There's a lot of nervousness around it. It's probably the single biggest danger to the economy," Kelly said.

In global trade, Asian markets finished mixed, while European stocks struggled to find direction in morning trading. The dollar was once again lower against the euro and the yen in early trading.

In corporate news, the telecommunications equipment firm 3 Com Corp. (Charts) is reportedly set to announce that it is putting itself up for sale for more than $2 billion to a pair of private equity firms, according to The Wall Street Journal.

Wall Street investment banks including Citigroup (Charts, Fortune 500) and Credit Suisse (Charts) sold$9.4 billion in loans that will be used in the leveraged buyout of First Data Corp., according to a report in the Journal. The sale of that debt was being closely watched as a sign of credit markets returning to normal.

Ford Motor (Charts, Fortune 500) may seek deeper cost cuts from the United Auto Workers union than those the union granted to General Motors (Charts, Fortune 500) this week in the deal that ended a two-day strike, according to a report in the Detroit News. The paper said that executives at Ford, which is losing more money on its North American operations than either GM or Chrysler LLC, needs deeper cuts in labor costs to be competitive.

The union may resume contract talks with Ford and Chrysler on Monday, according to a report in the Detroit Free Press. The UAW is due to start laying out details of the tentative agreement reached with GM to local union officials Friday ahead of the start of the rank and file ratification process that starts this weekend.

Shares of both GM and Ford were lower in Frankfurt trading early Friday.

Oil prices turned higher Friday after being down in earlier trading. A barrel of U.S. light sweet crude gained 36 cents to $83.24.