U.S. stocks were set for a flat open on Friday after a key report showed a rise in consumer prices in April, stoking investor expectations that the Federal Reserve will start boosting interest rates next month. Investors also sifted through mixed quarterly earnings reports from computer maker Dell Inc. and software maker BEA Systems Inc. . U.S. consumer prices rose modestly last month as a surge in energy costs lost steam, the government said, but a wide array of other price rises suggested mounting inflation pressure. "The top line came in a little better than expected, showing inflation is still a little bit tame," said Peter Cardillo, chief chief strategist at S.W. Bach and Co. "However the fact that the core rate came in where it did suggests that a June rate hike by the Fed is almost guaranteed."
Another report showed U.S. companies added heftily to their inventories in March, bringing stocks of goods on hand to a record level, but were unable to keep pace with strong demand. Equity index futures signaled a mixed open. Standard & Poor's 500 stock index futures for June ticked down 1.50 points, while Dow industrials futures lost 13 points. Nasdaq 100 futures for the same month added 4 points. Oil prices hit an all-time high on fears that disruption to Middle East oil flows may stress world fuel supplies already eroded by heady demand growth in China and the United States. Investors worry that a surge in prices at the gasoline pump will cause consumers to cut spending on other items. U.S. light crude rose 10 cents to a record $41.22 a barrel, its highest in the 21 years since the New York Mercantile Exchange launched the contract. The Federal Reserve releases industrial production and capacity utilization data for April at 9:15 a.m. (1315 GMT). Economists expect a median 0.3 percent increase in production and a reading of 76.7 percent for capacity utilization. The University of Michigan will release its preliminary report on May consumer sentiment at 9:45 a.m. (1345 GMT). A group of economists polled by expect a median 96.5, up from April's final result of 94.2. On the earnings front, Dell, the world's largest personal computer maker posted a 22 percent rise in first-quarter profit after the bell on Thursday as it took added market share and corporate demand improved. But Dell said the cost of computer memory increased in April and held back profits even as revenue rose beyond expectations.
Its shares fell to $34.74 on the INET electronic brokerage system from its close at $35.80 on the Nasdaq on Thursday. Business software maker BEA Systems on Thursday posted lower license sales due to poor execution in the Americas and strong competition from IBM, though its profit met Wall Street estimates. UBS said on Friday it cut its rating on the company to "neutral" from "buy." BEA fell to $9.12 on INET from its close at $10.78 on the Nasdaq on Thursday. Retailer Kohl's Corp. after the bell on Thursday said first-quarter profit edged up 2.5 percent, as it cut expenses and curbed markdowns at its chain of mid-priced department stores. It also gave an upbeat earnings outlook for the second quarter and backed its full-year forecast. Its shares were up to $43.01 before the bell from their close at $42.63 on the New York Stock Exchange.///