Stock Futures up Slightly following GMAC Lifeline

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NEW YORKWall Street headed for a moderately higher open Friday, but was still cautious about embarking on a year-end rally following dreary preliminary readings on holiday spending.

Not surprisingly, Americans spent much less on gifts this season than they did last year, according to SpendingPulse, a division of MasterCard Advisors. Retail sales dropped between 5.5 percent and 8 percent compared with last year, the data showed, or between 2 percent and 4 percent after stripping out auto and gas sales.

Personal consumption is a huge part of U.S. economic activity — comprising more than two-thirds of gross domestic product — so Wall Street is nervous that a more frugal consumer could keep the economy weak in 2009.

But investors did get a some good news on Christmas Eve, when the Federal Reserve allowed GMAC Financial Services — the finance arm of struggling Detroit automaker General Motors Corp. — to become a bank holding company and thus qualify for the government's $700 billion rescue fund. Analysts had said that without financial help, GMAC might have had to file for bankruptcy protection or shut down.

So far, with just four trading days left in the year, no news has been upbeat enough to spark a year-end rally on Wall Street. December is usually a strong month for the stock market, with a flurry of trading known as a "Santa Claus rally" often seen in the month's final week.

Japan on Friday reminded U.S. investors that the recession is not isolated to the United States. Japanese automakers and other manufacturers slashed their output last month by 8.1 percent — the biggest drop since records were started in 1953 — in the face of slowing demand overseas.

Ahead of the market's open, Dow Jones industrial average futures rose 46, or 0.55 percent, to 8,469. Standard & Poor's 500 index futures rose 5.70, or 0.66 percent, to 866.40, while Nasdaq 100 index futures rose 8.50, or 0.72 percent, to 1,188.50.

Trading volumes are expected to be extremely low on Friday as they were earlier this week. When trading is light, stock movements are often not indicative of broader market sentiment. Friday is also likely to be a quiet day of trading because there are no major economic or corporate reports scheduled.

In overseas trading, Japan's Nikkei stock index rose 1.63 percent. Hong Kong markets were closed, as were those in Britain, Germany and France.

The dollar was mixed against other major currencies, while gold prices slipped.

Light, sweet crude rose 99 cents to $36.34 a barrel in electronic premarket trading on the New York Mercantile Exchange. Crude prices had tumbled Wednesday for the ninth straight day following a raft of bad economic news and growing stockpiles of unused gasoline that suggested demand for energy has continued to erode. Light, sweet crude for February delivery fell as low as $35.13 on Wednesday just before the market closed for the Christmas holiday.