US stock futures fall after week of big gains

U.S. stock futures fell Friday after a rally that left the Standard & Poor’s 500 index on track for its best month since 1974.

Shares of appliance maker Whirlpool Corp. fell 11 percent in premarket trading after the company said it will cut 5,000 jobs, citing weak demand and higher costs for materials.

The government said Friday that consumer spending increased in September at three times August’s rate, but incomes were nearly flat and savings decreased. The result was in line with analysts’ expectations. Index futures barely reacted to that news.

Dow Jones industrial average futures fell 55 points, or 0.5 percent, at 12,113 at 9 a.m. Friday. Standard & Poor’s 500 index futures lost 7, or 0.6 percent, to 1,275. Nasdaq 100 futures slipped 11, or 0.5 percent, to 2,383.

Markets had soared Thursday after European leaders unveiled a deal aimed at defusing the Greek debt crisis. They agreed to expand a regional bailout fund and will force banks to keep bigger cash buffers to protect against future losses. Banks agreed to forgive half of Greece’s debt.

Hopes for Europe’s crisis plan propelled the Dow Jones industrial average up 340 points on Thursday, its biggest jump since Aug. 11. All 30 stocks in the Dow rose.

The Dow is up 11.9 percent this month, and could have its biggest monthly gain since January 1987. The S&P is up 13.5 percent this month, the most since October 1974.

In less than four weeks, the Dow has risen 14.6 percent from its 2011 low, reached on Oct. 3. The S&P has gained 16.9 percent in that time. However, the Dow remains 4.7 percent below this year’s high, reached on April 29. The S&P is 5.8 percent below its high.

Thursday’s stock rally sparked a selloff in Treasurys, which traders hold to protect their money when other investments are falling. Demand for Treasurys edged higher early Friday. The yield on the 10-year Treasury note edged down to 2.35 percent from 2.39 percent late Thursday. Thursday’s yield was a ten-week high; it rose from 2.11 percent late Tuesday as hopes for the European crisis plan increased.

Markets have been roiled for months by fears about the impact of Europe’s debt crisis. Greece couldn’t afford to repay its lenders, and banks holding Greek bonds faced billions in losses. A disorganized default by Greece threatened to spook lenders to other countries with heavy debt loads, such as Spain and Italy. Traders feared that a wave of defaults by countries would cause financial panic and mire the global economy.

Some analysts said Thursday’s rally marked a turning-point. They expect traders to focus on U.S. economic news after monitoring Europe for months. The government reports next week on the pace of hiring in October. A news conference from Federal Reserve Chairman Ben Bernanke will offer clues about the Fed’s economic outlook. Key reports on manufacturing and business sentiment are due out as well.

The economy grew at a 2.5 percent annual rate in the third quarter, the government said Thursday. That’s too slow to bring down unemployment, but is far stronger than the first half of the year.

Some skeptics cautioned that the rally might not be sustained. They warned that the Europe deal lacks details, and merely buys leaders some time to address the thornier issues.

One signal that the crisis threat still looms: Italy’s borrowing costs continued to rise, signaling that traders remain worried about its financial health.

European markets alternated between gains and losses as traders turned a more skeptical eye to the crisis plan, and began to ask how it will work.