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

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By Steve Goldstein, MarketWatch

LONDON (MarketWatch) -- U.S. stock futures leaned higher Friday, with markets looking set for a quiet finish to a volatile week ahead of the release of several economic indicators.

In the last trading day before a three-day break, S&P 500 futures rose 2.5 points to 1,103.60 and Nasdaq 100 futures added 3.5 points to 1,867.20.

Futures on the Dow Jones Industrial Average added 18 points.

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U.S. stocks rallied Thursday on relief that China denied it was going to take action on its holdings of euro-zone governments. 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 Jones Industrial Average is heading 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 not 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 includes personal income and spending for April, as well as May readings of a Chicago-area and the final University of Michigan consumer confidence survey.

Of companies in the spotlight, Prudential PLC /quotes/comstock/13*!puk/quotes/nls/puk (PUK 16.06, +1.56, +10.76%) said it was in discussions with American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 36.46, +2.41, +7.08%) over the $35.5 billion acquisition of AIA.

Royal Dutch Shell /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 53.01, +2.66, +5.28%) said it paid $4.7 billion for a privately held owner of Shale gas assets.

BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 45.38, +2.97, +7.00%) 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.

Overseas, the Nikkei 225 added 1.2% in Tokyo and the Stoxx Europe 600 edged 0.4% higher.

The U.S. dollar index /quotes/comstock/11j!i:dxy0 (DXY 86.04, -0.15, -0.17%) weakened 0.3% while yields on 10-year Treasury bonds fell 4 basis points to 3.32%. Yields move in the opposite direction to prices.

Oil futures traded over $75 a barrel.

Steve Goldstein is MarketWatch's London bureau chief.