Stocks head toward lower open as investors await manufacturing data

By The Associated Press

NEW YORK — U.S. stocks appeared headed for a sharply lower opening Thursday as skittish investors seemed unimpressed by improved personal income and consumption data and took their cues from falling markets overseas.

Investors appeared rattled by the specter of a drop in the yen carry trade, which refers to the process of borrowing yen to acquire assets with greater yields in other currencies.

Stocks in Asia and Europe lost ground Thursday. Adding to the pessimistic mood, Southeastern and Mid-Atlantic regional bank SunTrust Banks Inc. reduced its fourth-quarter and full-year net income figures, saying it needed to account for an increased loan loss provision. The soured loan relates to a commercial borrower, not the subprime lending market that have given investors concern recently.

Better-than-expected U.S. economic data seemed to offer investors little assurance.

The Commerce Department said personal incomes rose in January at the fastest pace in a year, fueled in part by executive bonuses and pay hikes for federal workers. Personal incomes rose by 1 percent in January while consumer spending was up by 0.5 percent. The income advance was the largest since January 2006. A confident consumer willing to spend is integral to ushering the economy to the gradual slowdown Wall Street has been hoping for.

More data is to come. The Institute for Supply Management’s index of manufacturing activity for February, which is due after the market opens, is an important measure of a part of the economy that has given investors headaches in recent months. Manufacturing has struggled and at times given off signals that a recession might be in the offing. The market predicts the ISM number will come in at 50.0, up from 49.3 last month. The figure is important as 50 and above indicates expansion, while anything below 50 signals contraction.