U.S. stocks lower in afternoon trade; Dow down 0.8%

Forexpros – U.S. stocks moved lower in Friday trade, bouncing back from session lows on better than expected manufacturing activity figures, but generally lower on a weak U.S. income report.

In late afternoon U.S. trade, the Dow Jones Industrial Average was down 0.78% to 11,067.29, the Nasdaq Composite Index lost 1.18% to 2,451.47, and the S&P 500 declined 1.04% to trade at 1,148.37.

The U.S. Bureau of Economic Analysis reported that personal income in August fell by a seasonally adjusted 0.1%, matching market expectations, while consumer spending rose by 0.2% for the month.

Research group Kingsbury International’s Chicago Purchasing Manager’s Index rose to 60.4 in September, up from 56.5 in August. Analysts had expected the index to fall to 56.0 for the month.

Meanwhile, the European Union’s Statistics Office reported that euro-zone inflation jumped by 3% in September, up for 2.5% in August, the largest year on year increase since October of 2008.

The rise in prices quashed hopes that the European Central Bank would be lowering interest rates any time soon, complicating the ECB’s options for addressing the region’s debt concerns.

By the the end of Friday’s European session, the STOXX 50 Index added 1.52%, France’s CAC 40 climbed 1.02%, Britain’s FTSE rose 0.24%, and Germany’s DAX advanced 0.63%.

Financial issues were among decliners with JP Morgan Chase & Co. down by 2.8% and Bank of America Corp losing 2.6%.

Ingersoll-Rand slumped by 13%, second most on the S&P 500, after the company forecast third-quarter earnings below analyst’s estimates.

And Micron Technology plummeted 14%, top decliner on the S&P, after the memory chip manufacturer reported an unexpected loss for the fourth quarter on weak global demand for computers.

Among gainers was Wal-Mart Stores Inc. up 0.88% on the release of improved consumer spending figures.

And Oracle Corp. dropped 2.12% after the company was sued by a retirement fund over the purchase of Pillar Data Systems Inc., majority owned by Oracle CEO, Larry Ellison.

The U.S. Institute of Supply Management’s Manufacturing Purchasing Manager’s Index, an indication of general U.S. business conditions, was scheduled for release Monday.