* University of Michigan consumer sentiment data, leading
indicators on tap
* J.C. Penney dips after earnings
* Kansas City Southern to join S&P 500
* Futures up: Dow 39 points, S&P 5 points, Nasdaq 8.25
By Chuck Mikolajczak
NEW YORK, May 17 (Reuters) - U.S. stock index futures rose
on Friday, indicating the S&P 500 will rebound from its worst
decline in nearly three weeks, keeping the index on track for
its fourth straight weekly advance ahead of data on consumer
The benchmark S&P index fell 0.5 percent in the prior
session, its biggest decline since May 1, after a Federal
Reserve official said the U.S. central bank could begin reducing
its monetary stimulus program this summer.
The central bank's program of $85 billion a month in bonds
has been a major driver of the rally in equities that has taken
both the Dow and S&P 500 indexes to record highs and sent
both indexes up about 16 percent for the year.
"There is this money that has been sloshing around the
system; people are chasing yield, they have to, they are not
getting any kind of yield on the bank deposits or bond
portfolios - so it's going into the equity markets," said Keith
Bliss, senior vice-president at Cuttone & Co in New York.
"Capital goes where capital gets rewarded."
Data expected on Friday includes the Thomson
Reuters/University of Michigan Surveys of Consumers preliminary
May consumer sentiment index at 9:55 a.m. (1355 GMT). Economists
in a Reuters survey expect a reading of 78.0 compared with 76.4
in the final April report.
At 10 a.m. (1400 GMT) the Conference Board is due to release
its report on April leading economic indicators. Economists in a
Reuters survey forecast a 0.2 percent rise compared with a 0.1
percent drop in March.
The stimulus measures taken by central banks around the
globe have enabled investors to shrug off more recent economic
data indicating only sluggish improvement in the U.S. economy.
S&P 500 futures rose 5 points and were above fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures gained 39
points, and Nasdaq 100 futures added 8.25 points.
J.C. Penney Co Inc shares shed 1.8 percent to $18.45
in premarket trade after the retailer reported another steep
quarterly loss on weak sales and heavy clearance deals and Chief
Executive Myron Ullman cautioned he needs time to fix the issues
of the retailer.
S&P Dow Jones Indices said after the close on Thursday that
S&P MidCap 400 component Kansas City Southern
will replace Dean Foods Co in the S&P 500.
Aruba Networks Inc plunged 21.6 percent before the
opening bell after the network equipment maker released
fourth-quarter results well below Wall Street expectations, hurt
by rising competition from Cisco Systems Inc.
European shares held near multi-year highs in volatile
trade, with some investors using early weakness as a buying
opportunity and with carmakers cheered by signs of a revival in
Asian shares were mixed, although some individual Asian
stock markets pushed higher, with mainland Chinese shares up 1.5
percent and Japan's Nikkei share average
advancing 0.7 percent.