Indications: U.S. stock futures edge up as May winds down

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By Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures clung to slight gains Friday, with markets looking set for a quiet finish to what's been a volatile week after the release of several economic indicators.

Major index futures pared their already modest gains as economic data released ahead of Wall Street's open had U.S. personal income higher by 0.4% and spending holding flat in April.

S&P 500 futures rose 1.4 points to 1,102.5 and Nasdaq 100 futures gained 2.25 points to 1,866.00.

Futures on the Dow Jones Industrial Average added 7 points.

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U.S. stocks rallied hard Thursday, on relief that China's denial that it would take action on its holdings of euro-denominated bonds. The Dow Jones Industrial Average climbed 284 points, or 2.9%, in the second-biggest one-day advance of the year.

That said, the Dow industrials head into the final trading day of May with a 6.8% monthly decline.

Garry Evans, global head of equity strategy at HSBC, said the market turbulence of late is a normal correction and doesn't constitute a new bear market.

"While superficially stocks fell because of worries about European debt, to our mind the drop was more because of a convergence of negative factors such as a peaking of U.S. earnings momentum and shrinking liquidity, exacerbated by investment funds that had chased markets up in March and held too-low levels of cash," Evans said in a note to clients.

"In our view the cyclical upswing remains strong and the advantage of the recent wobble is that interest rates, even in emerging markets, will not go up soon."

Friday's data calendar later includes May readings of Chicago-area manufacturing activity and the final University of Michigan consumer confidence survey.

Among companies in the spotlight, Prudential PLC /quotes/comstock/13*!puk/quotes/nls/puk (PUK 15.65, -0.41, -2.54%) said it was in discussions with American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 35.73, -0.73, -2.00%) over the $35.5 billion acquisition of AIG-owned AIA.

Royal Dutch Shell /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 52.87, -0.14, -0.26%) said it paid $4.7 billion for a privately held owner of shale gas assets.

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 43.35, -2.03, -4.47%) was continuing its top-kill operation to stem the flow of oil from the Gulf of Mexico spill. Spill-related costs have reached $930 million, BP said.

Apple /quotes/comstock/15*!aapl/quotes/nls/aapl (AAPL 255.30, +1.95, +0.77%) climbed as it launched the iPad overseas and after published reports of a positive Bank of America Merrill Lynch broker note.

Overseas, the Nikkei 225 moved 1.2% higher in Tokyo and the Stoxx Europe 600 added 0.5%.

The U.S. dollar index /quotes/comstock/11j!i:dxy0 (DXY 86.26, +0.07, +0.08%) weakened 0.1% while yields on 10-year Treasury bonds /quotes/comstock/20m!i:tnx (TNX 33.22, -0.16, -0.48%) fell 4 basis points to 3.32%. Bond prices move inversely to their yields.

In energy dealings, crude-oil futures traded just under $75 a barrel.

Steve Goldstein is MarketWatch's London bureau chief.