Assuming no last minute deal, $85 billion in automatic spending cuts are due to begin Friday, although it may be weeks or months before the pain is felt. Still, markets are likely to remain in a cautious mood as major indexes hover just below record highs.
U.S. stock futures were lower before the opening bell.
The Commerce Department reported that personal income fell 3.6% in January, which was the steepest month-to-month drop in 20 years. Personal income was expected to have dropped 2.4%, according to a Briefing.com consensus of economist forecasts. Personal spending notched up 0.2%, as expected.
Paul Donovan, UBS economist in London, said that recent highs on Wall Street have made stocks sensitive to lackluster markets in Europe and Asia -- particularly in China after a "softer than anticipated" manufacturing report. He also said Europe continues to be unsettled by political turmoil in Italy.
Eurostat reported the euro zone unemployment edged up to 11.9% in January. Italy's unemployment was slightly lower than that, at 11.7%, but its youth unemployment has reached a staggering 38.7%.
At 10 a.m. ET, the Census Bureau publishes data on construction spending. Construction spending is expected to have increased 0.5% in January.
Also at 10, the Institute for Supply Management will release its monthly manufacturing report, and the University of Michigan and Thomson Reuters will publish the final edition of their consumer sentiment index for February. The ISM Index is expected to have slipped to 52.4 in March, from the prior month's index of 53.1, according to Briefing.com consensus. Anything above 50 signifies expansion.
The University of Michigan consumer reading is expected to remain at 76.3 for February.
In corporate news, Best Buy (Fortune 500)'s stock rose 5% in premarket trading after the electronics retailer reported that its quarterly revenue rose slightly year-to-year, despite the closure of 49 big box stores. ,
The company said that same-store sales rose nearly 1% in the U.S, but dipped nearly 1% internationally. Best Buy said its adjusted diluted earnings per share fell to $1.64, from $2.18 in the year-earlier quarter.
U.S. stocks ended in the red Thursday, with the Dow stalling just below its all-time high.
Groupon ( shares rose 3.5% in premarket trading Friday after the daily deals site announced that embattled CEO )Andrew Mason would be replaced.
Gap (Fortune 500) shares rose 3.6% in premarket trading following fourth-quarter earnings from the apparel maker Thursday that beat expectations. ,
Shares of Salesforce.com ( rose 3% in premarket trading following strong earnings announced after the bell. )
|Safety group claims 303 deaths linked to recalled GM cars|
|Number of millionaire households in the U.S. reaches high|
|Madoff employee trial nears the end|
|Meet the SAT tutor to the 1%|
|Mark Zuckerberg calls Obama to complain about NSA|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.29%||4.39%|
|15 yr fixed||3.35%||3.42%|
|30 yr refi||4.30%||4.40%|
|15 yr refi||3.33%||3.40%|
Today's featured rates: