Wall Street set for flat open with S&P record in sight

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks were poised to open little changed on Friday as investors grappled with a flurry of economic data, with the S&P within striking distance of an all-time closing high.

Data showed consumer prices increased 0.7 percent in February, the largest increase in nearly four years, but not enough to garner much attention from the Federal Reserve as much of the increase was driven by a spike in gasoline prices.

In addition, New York Federal Reserve data showed the manufacturing sector expanded for a second straight month in March, although the 9.24 reading was down from 10.04 in February and expectations for a reading of 10.

 

Encouraging labor market data helped the Dow Jones Industrial Average <.DJI> extend its winning streak to 10 days on Thursday, while the benchmark S&P index <.SPX> finished just shy of its all-time closing high of 1,565.15.

Improving economic signs and expectations that the Federal Reserve will continue its easy monetary policy have helped boost the Dow by nearly 11 percent and the S&P by 9.6 percent this year so far, with no major pullbacks.

"If we do get a little bit of a retracement it's just a dip and all these dips are being met by investors looking to buy any kind of reversal they can get near," said Gordon Charlop, managing director at Rosenblatt Securities in New York.

"So at this point it looks like the S&P won't stop until it breaks the high, and then some."

S&P 500 futures added 1 point and was roughly even with 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 gained 1 points, and Nasdaq 100 futures added 3.75 points.

Market volatility may be heightened at the open and near the close due to 'quadruple witching' - the quarterly settlement and expiration of four different types of March equity futures and options contracts. Expiration can lead to greater volume and volatility as players adjust or exercise their derivative positions.

Data from Thomson Reuters' Lipper service showed investors in U.S.-based funds poured $11.26 billion of new cash into stock funds in the latest week, the most since late January.

The Federal Reserve told Goldman Sachs Group Inc and JPMorgan Chase & Co that they must fix flaws in how they determine capital payouts to shareholders, but still approved their plans for share buybacks and dividends.

A Senate report also alleged JPMorgan had ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in a derivatives portfolio.

JPMorgan shares dipped 1.6 percent to $50.17 in premarket trading. Rival Bank of America rose 3.8 percent to $12.57 before the opening bell.

Ulta Salon slumped 14 percent to $76 in premarket trading after the beauty products retailer forecast first-quarter profit below Wall Street estimates, despite strong results.

At 9:55 a.m. (1355 GMT), the Thomson Reuters/University of Michigan preliminary March consumer sentiment index will be released. A reading of 78.0 is expected compared with 77.6 in the final February report.

(Editing by Bernadette Baum)