Stock futures were modestly positive on a snowy Friday morning ahead of a wave of economic data

Stock futures were modestly positive on a snowy Friday morning ahead of a wave of economic data, including the second reading on the nation’s fourth-quarter gross domestic product. As of 6:45 a.m. in New York, the Dow Jones Industrial Average future gained 26 points, or 0.25%, to 10342, the S&P 500 futures were up 2.9 points to 1105.20 and the Nasdaq 100 futures gained 3 points to 1816.50. Investors will get the Commerce Department’s GDP report at 8:30 a.m. today, which economists expect the report will show the U.S. economy grew at a 5.7% annualized pace during the last three months of the year. The 5.7% growth is same pace that was reported in last month’s GDP report.

Last month’s GDP report showed the economy was helped greatly by business inventory adjustments, which gave investors pause about how well the U.S. economy was improving. Wall Street will be looking to see if consumer spending, which makes the largest percent of the nation’s economy, picked up more than originally reported. Other economic reports out this morning include the Chicago Purchasing Managers index at 8:30 a.m.. the University of Michigan consumer sentiment report at 9:55 a.m. and the National Association of Realtors existing home sales report.Economists expect that consumer sentiment rose slightly to a reading of 73.9 in February while existing home sales increase to a 5.5 million unit pace in January.

A modest decline in the U.S. dollar helped commodities rise overnight, with oil up 0.3% to $78.42 a barrel and gold up 0.25% to $1,111.20 a troy ounce. Also on the agenda today is the earnings results from government-owned insurer American International Group (AIG). While few analysts cover the company anymore, Wall Street expects AIG to report a loss of $3.94 a share last quarter excluding special items. On Thursday, the Dow fell 53.13 points, or 0.51%, to 10321.03, the Standard & Poor’s 500 sank 2.30 points, or 0.21%, to 1102.94 and the Nasdaq Composite lost 1.68 points, or 0.08%, to 2234.22. The FOX 50 slid 3.30 points, or 0.41%, to 797.41.

SINGAPORE Oil prices hovered above $78 a barrel Friday in Asia amid mixed signals about global crude demand

SINGAPORE Oil prices hovered above $78 a barrel Friday in Asia amid mixed signals about global crude demand.Benchmark crude for April delivery was up 16 cents to $78.33 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.83 to settle at $78.17.

Oil prices have bobbed between $70 and $80 for most of the last six months as investors mull growing crude demand in developing countries such as China offset by flagging consumption in developed countries.Even a cold winter in the U.S. has failed to boost demand for heating oil.”The absence of any sustained seasonal draw in heating oil inventories is still striking,” Barclays Capital said in a report. “The inventory overhang remains stubbornly high.””We continue to expect strong demand growth from China in 2010.”

Crude prices were bolstered by a weaker U.S. dollar, as dollar-based commodities such as oil become cheaper for investors with other currencies when the dollar falls. The euro rose to $1.3585 on Friday from $1.3547 the previous day.In other Nymex trading in March contracts, heating oil fell 0.37 cent to $1.9825 a gallon, while gasoline rose 0.87 cent to $2.0457 a gallon. Natural gas prices gained 4.8 cents to $4.815 per 1,000 cubic feet.In London, Brent crude was up 10 cents at $76.39 on the ICE futures exchange.(AP)

World markets fell Friday after the U.S. Federal Reserve unexpectedly raised interest rates for emergency bank loans

LONDON  World markets fell Friday after the U.S. Federal Reserve unexpectedly raised interest rates for emergency bank loans, triggering fears that regular borrowing costs could also move higher soon, slowing the recovery in the world’s largest economy.The central bank said Thursday it will bump up the “discount” lending rate by one-quarter point to 0.75 percent effective Friday, part of a pullback of the extraordinary aid it provided to fight the financial crisis.Although the Fed said the step should not be seen as a signal that it will soon boost interest rates for consumers and businesses, markets were spooked.After sharp drops in Asia, Germany’s DAX stock index was down 0.2 percent at 5,671.28 and Britain’s FTSE 100 was flat at 5,326.84. France’s CAC-40 fell 0.2 percent to 3,742.09.Wall Street was also expected to fall on the open. Dow Jones industrials futures were down 50 points at 10,325.00 and Standard & Poor’s 500 futures were 8.2 points lower at 1,097.40.

Growing optimism about the strength of the U.S. economy had helped boost the Dow Jones industrial average rise by 3 percent over the past three days. But the surprise Fed announcement after Wall Street trading closed left traders wondering whether the so-called “exit strategy” from a loose monetary policy could come faster than expected and stifle U.S. consumer demand.”It begs the questions of why this was not done, or at least signaled at a regular Federal Open Market Committee meeting,” said Marc Ostwald, strategist at Monument Securities in London.”It certainly is the case that the Fed wants to see how money markets function without so much of the liquidity life support that the Fed has been providing, and as such one can term this a form of ‘kite flying’,” said Ostwald.The Fed move, which doesn’t change consumer borrowing rates, also helped boost the U.S. dollar and push the euro below nine-month lows – a sign traders may be turning away from higher-risk investments, analysts said.The euro fell to $1.3504 from $1.3529 late Thursday after trading at nine-month lows below $1.3400. After rising against the Japanese yen, the dollar was flat at 91.75 yen.

The euro has been under pressure in recent months over worries about the debt problems of Greece and other countries in Europe, such as Portugal and Spain. Although the EU said it was committed to helping Greece in case of a default, it did not provide any concrete plans for a bailout but limited itself to demand more spending cuts.Economic data in Europe, meanwhile, failed to shore up investor sentiment. The purchasing managers’ survey of the eurozone, an economic indicator published by Markit research group, was stable in February, suggesting the recovery from recession has stagnated somewhat.A rise in the manufacturing reading offset a drop in the services sector, providing “little hope that the much-needed domestic recovery is beginning to materialize,” said Ben May, European economist at Capital Economics in London.Markets in China and Taiwan are closed this week for the Lunar New Year holiday.Earlier in Asia, Hong Kong’s Hang Seng stock index led decliners, diving 528.13, or 2.6 percent, to 19,894.02 while Japan’s Nikkei 225 stock average dropped 212.11, or 2.1 percent, to 10,123.58.”As the dollar strengthens, we see less appetite for riskier assets such as Asian stocks.” said Jit Soon Lim, head of equity research for Southeast Asia for Nomura in Singapore. “We’re bullish on the region’s economic growth, but bearish on risk.”

South Korea’s Kospi declined 27.29, or 1.7 percent, to 1,593.90. India fell 1 percent and Indonesia dropped 0.5 percent.Singapore’s stock measure retreated 0.9 percent despite an increase of the government’s 2010 economic growth forecast to between 4.5 percent and 6.5 percent from 3 percent to 5 percent.In the U.S. on Thursday, the Dow rose 83.66, or 0.8 percent, to 10,392.90 while the broader Standard & Poor’s 500 index rose 7.24, or 0.7 percent, to 1,106.75. The Nasdaq composite index rose 15.42, or 0.7 percent, to 2,241.71, its fifth straight advance.Oil prices slid to near $78 a barrel after the Fed’s rate hike sent the U.S. dollar higher.Benchmark crude for March delivery was down 90 cents at $78.16 in electronic trading on the New York Mercantile Exchange. The contract added $1.73 to settle at $79.06 on Thursday.(AP)