Stocks trade slightly lower as investors balance Dubai fears with holiday retail sales

Stocks open slightly lower on Dubai concerns

NEW YORK — Stocks are trading slightly lower as investors weigh concern about fallout from Dubai’s debt crisis against improving signs from U.S. consumers.

Global markets were stabilizing Monday following an announcement late last week that Dubai World, the main investment arm of the Persian Gulf city-state, asked to defer $60 billion in debt repayments for six months.

While investors remain cautious about fresh credit market worries, there were positive early signs from the first weekend of holiday shopping season.

The Dow Jones industrial average is down 16.02, or 0.2 percent, at 10,293.90. The Standard & Poor’s 500 index is down 0.89, or 0.1 percent, at, 1,090.60, while the Nasdaq composite index is down 4.40, or 0.2 percent, at 2,134.04.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

NEW YORK (AP) — Stock futures were modestly higher Monday as investors try to balance concern about fallout from Dubai’s debt crisis against encouraging signs from U.S. consumers.

After initial sharp declines late last week, global markets are stabilizing following an announcement that Dubai World, the main investment arm of the Persian Gulf city-state, asked to defer $60 billion in debt repayments for six months.

There was worry that a debt default could touch off a new round of credit market worries, which plagued stocks last year as Lehman Brothers collapsed and banks stopped lending to each other.

However, it appears there is limited exposure to the debt in the U.S., which has eased some concerns. The United Arab Emirates, where Dubai is located, also said Sunday it will make extra funding available to all banks in the country, including foreign banks with local offices.

Analysts say European banks have more exposure than their U.S. counterparts. Asian stocks rallied sharply on Monday, while European markets were lower. Dubai’s market, which was opened Monday for the first time since the debt deferment announcement, fell nearly 6 percent.

Rob Lutts, president and chief investment officer of Cabot Money Management, said that while some investments will be lost in Dubai, the global stock markets have now accounted for those potential losses.

“We’ve seen the impact,” Lutts said, pointing to Friday’s sharp declines. “I think that issue is known now.”

Ahead of the opening bell, Dow Jones industrial average futures rose 15, or 0.2 percent, to 10,307. Standard & Poor’s 500 index futures rose 2.40, or 0.2 percent, to 1,091.90, while Nasdaq 100 index futures gained 5.25, or 0.3 percent, to 1,764.50.

Some encouraging signs from U.S. consumers helped to offset concerns about fallout from the Dubai debt crisis. Consumer spending accounts for more than two-thirds of all U.S. economic activity, so a robust holiday shopping season would put investors at ease that the economy is recovering.

Investors have been worried that rising unemployment would make shoppers uncomfortable about spending during the holidays. A key report on the nation’s unemployment rate is due out Friday.

Preliminary figures by ShopperTrak, a research firm that tracks more than 50,000 outlets, showed sales rose 0.5 percent on Friday, the kickoff to the holiday shopping season. Online sales jumped 11 percent Thursday and Friday, according to comScore, an Internet research firm.

Early reports on sales were “modestly positive,” Lutts said, noting that expectations were low entering the season.

Retailers will provide further insight into the strength of the consumer on Thursday when they report key monthly sales figures for November.

Lutts said the most important issues the market will be paying attention to in the coming days are income, jobs and consumer spending.

Stocks tumbled in holiday-shortened trading Friday as concern grew about Dubai’s debt problems. The Dow dropped 155 points before closing three hours early for the Thanksgiving holiday. It had dropped as much as 233 points early in trading.

The move away from riskier stocks sent the price of safe-haven investments like Treasury bonds higher. The dollar also strengthened, pushing commodity prices lower.

Bond prices fell Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.23 percent from 3.21 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.05 percent from 0.01 percent.

The dollar mostly fell against other major currencies, while gold prices also dipped.

Overseas, Japan’s Nikkei stock average rose 2.9 percent. Britain’s FTSE 100 declined 0.7 percent, Germany’s DAX fell 0.8 percent and the CAC-40 in France dropped 0.8 percent.