Wall Street set for higher open

Friday on tap

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NEW YORK (CNNMoney.com) -- U.S. stock futures pointed to a higher open Friday as sentiment recovered after two straight sessions of declines.

About three hours before the market open, Nasdaq and S&P futures were higher, suggesting gains at the opening bell.

Stocks have gyrated recently amid ongoing concerns about the frail economy and financial sector. The major gauges attempted a comeback Thursday but finished the session lower.

Investors will take in a report on personal income and spending at 8:30 a.m. ET, which will be viewed for clues as to whether consumer spending is weakening.

Economists surveyed by Briefing.com forecast that spending rose only 0.1% in February, down from the 0.4% gain in January. Personal income is expected to post the same 0.3% rise it did the previous month.

The report includes an inflation reading that is closely watched by the Federal Reserve and other economists. The so-called core PCE deflator, which measures consumer prices, excluding food and energy, is forecast to post only a 0.1% rise. That's down from the 0.3% jump the previous month.

A mild inflation reading will be seen as giving the Fed a green light to keep cutting rates, while an unexpected jump in the core PCE could raise concerns that the Fed will have to pull back on future rate cuts.

Investors will also digest the University of Michigan's revised reading on March consumer sentiment, which is due out at 10 a.m. ET. Economists forecast that index slipped to 70 from the 70.5 reading earlier in the month.

In major corporate news, radio station operator Clear Channel Communications (CCU, Fortune 500) warned in a Securities and Exchange Commission filing that its purchase by private equity groups might not happen, or that the deal's closing could be pushed beyond Monday's target date. The filing is the latest sign in trouble that firms are having arranging financing for deals.

Bear Stearns (BSC, Fortune 500) chairman James Cayne sold his entire stake in the investment bank after JPMorgan (JPM, Fortune 500) quintupled its takeover bid for the firm, according to a filing made with the SEC late Thursday.

The move suggests that Cayne, who made $61 million on the stock sale, doesn't believe Bear will receive a higher bid from JPMorgan and that the deal will go ahead at the $10 a share offered price.

Citigroup (C, Fortune 500) is set to hire an outsider, Terri Dial, who currently runs Lloyds TSB Group's British retail banking unit, to run its global consumer banking division, according to numerous published reports.

Lehman Brothers (LEH, Fortune 500), the Wall Street brokerage firm that has been dogged by rumors of trouble since the collapse of Bear Stearns two weeks ago, was upgraded early Friday by the analysts at Citigroup, which raised its recommendation on the stock to a buy from a hold and set a $65 target price for its shares. Lehman Brother shares, which closed Thursday at $38.71, jumped 4% in early trading in Frankfurt.

Drugmaker Wyeth (WYE, Fortune 500) announced late Thursday that about 1,200 U.S. sales representatives were told their positions are being eliminated as of Monday. In late January, Wyeth told managers about 10 percent of its 50,000 employees worldwide might lose their jobs by 2011.

KB Home (KBH, Fortune 500), the nation's No. 5 builder by revenue, is set to report results ahead of the open Friday. Analysts surveyed by Briefing.com forecast that it will post its fourth straight loss, although this loss estimate of $1.17 a share is smaller than the losses posted the previous three periods.

Oil prices retreated slightly in early trading as the price of barrel of light sweet crude slipped 21 cents to $107.37

In global trade, shares in Japan finished higher. European markets edged higher in early trading.