By Ryan Vlastelica

S&P 500 poised for sixth straight monthly gain, best quarter since 2013

U.S. stock-index futures pointed to a lower open on Friday, setting major indexes up for a week of solid losses, although they were poised to end both the month of September and the third quarter of 2018 with gains.

Where are the major benchmarks trading?

Futures for the Dow Jones Industrial Average fell 120 points, or 0.5%, to 26,353. S&P-500 futures lost 11 points to 2,909, a decline of 0.4%. Nasdaq-100 index futures were down 36 points, or 0.5%, to 7,621.

Should the move implied by futures hold, the Dow is looking at its fourth decline of the past five sessions, while the S&P is on track for its fifth decline of the past six.

So far this week, the Dow is down 1.1% in what could be its biggest weekly loss since late June. The S&P has dropped 0.5%. The Nasdaq remains up 0.7% for the week, as of Thursday's close. Should the Dow and S&P end in negative territory, that would mark their first weekly decline of the past three weeks, but only their third of the past 10.

Friday marks the final trading day of the month of September, a month that has historically been the weakest (http://www.marketwatch.com/story/stock-market-likely-to-undergo-vigorous-stress-test-in-september-2018-08-23) of the year for U.S. stocks. The Dow, however, is on track for a 1.8% monthly advance, its third straight gain, while the S&P is up 0.4% in its sixth straight monthly advance. The Nasdaq is down 0.8% in September, and poised to snap a five-month winning streak.

Don't miss:Should investors fear October, a historic 'jinx month' for stocks? (http://www.marketwatch.com/story/should-investors-fear-october-a-historic-jinx-month-for-stocks-2018-09-26)

Friday also represents the final day of the third quarter. Over the past three months, the S&P has risen 7.2%, which is set to be its biggest quarterly advance since the fourth quarter of 2013. The Dow is up 8.9%; both the Dow and the S&P have risen in 11 of the past 12 quarters. The Nasdaq is up 7.1% over the quarter, and it is set for its ninth straight quarterly gain.

Read:Investors banking on a stock market rally after the election should take a look at this chart (http://www.marketwatch.com/story/did-the-stock-market-already-get-its-midterm-election-bump-2018-09-27)

What's driving trading?

Recent trading has been relatively quiet on Wall Street, with few corporate earnings to drive the market. Despite the market's loss for the week, the trading range has been tight; the S&P hasn't closed with a move of even 0.5% in either direction any day this week.

Tesla Inc. (TSLA) could be a primary focus for investors on Friday, a day after the Securities and Exchange Commission sued Elon Musk, the electric-car maker's chief executive officer. The SEC is alleging that Musk misled investors (http://www.marketwatch.com/story/sec-sues-elon-musk-for-misleading-tweets-seeks-to-bar-tesla-ceo-from-running-public-company-2018-09-27) when he tweeted that he was considering taking the company private, and it is seeking to ban him from serving in his role of CEO.

The stock fell 11% in premarket trading, its latest bout of heavy volatility. The stock has lost more than 12% over the past three months.

While Tesla has a limited impact on the broader indexes -- it isn't a component of the S&P 500 -- it is sometimes seen as a proxy for high-risk and high-growth stocks, a segment of the market that have been fueling the market's gains in 2018. While Tesla's issues are company-specific, weakening sentiment about the growth space overall could impact the broader market.

Separately, Italy's antiestablishment government has significantly widened its budget-deficit target (http://www.marketwatch.com/story/italy-heads-for-showdown-with-eu-budget-deficit-goal-stretches-to-24-2018-09-28) for next year to fund its electoral promises, a move that will likely put it on collision course with the European Union. The issue is the latest bit of geopolitical turbulence that could impact Wall Street, following a currency crisis in Turkey earlier this summer.

Don't miss:Italy's budget drama: What you need to know (http://www.marketwatch.com/story/italys-budget-drama-what-you-need-to-know-2018-09-27)

In the latest economic data, consumer spending rose 0.3% in August (http://www.marketwatch.com/story/consumer-spending-rises-in-august-at-slowest-pace-in-six-months-2018-09-28), the slowest pace since February. Personal income also rose by 0.3%. The 12-month increase in the PCE index, the Federal Reserve's preferred inflation gauge, fell to 2.2% from 2.3%.

The Chicago Purchasing Manager's Index for September will come out at 9:45, followed by a September reading of consumer sentiment 15 minutes later.

Issues surrounding trade policy also lingered. On Wednesday, President Donald Trump accused Beijing, without public evidence, of trying to interfere in the U.S. midterm elections and of attempting to damage him politically. The accusations come as a trade dispute between the two countries grows more heated with the imposition of a 25% tariff on more than $200 million of Chinese imports to the U.S.

While investors have repeatedly shrugged off the trade issue, focusing instead of strong economic data and corporate earnings, any additional developments on this front could dictate short-term market direction.

What are market analysts saying?

"Italy has been a big concern for weeks now, and if the situation gets worse, you can expect the market to sell off in a meaningful way. The big issue is contagion: will this spread? If it does, that could trigger a recession, which will drag down European GDP and also have a negative impact for U.S. multinationals," said Adam Sarhan, chief executive of 50 Park Investments.

"For Tesla, a lot of Musk's recent actions raise questions about his decision-making abilities," he said. "If his tweet was just reckless behavior and ego, clearly that will be bad news for the stock. And if this issue means that the Nasdaq, one of the leading indexes this year, starts to turn lower, that would be a real cautious signal to me about growth stocks overall."

What stocks are in focus?

Shares of Applied Optoelectronics Inc. (AAOI) sank 14% in premarket trading after the company cut its third-quarter revenue outlook (http://www.marketwatch.com/story/applied-optoelectronics-stock-plummets-after-revenue-guidance-cut-2018-09-28).

J.C. Penney Co. (JCP) said that Chief Financial Officer Jeffrey Davis was resigning (http://www.marketwatch.com/story/jc-penney-shares-rise-as-cfo-jeffrey-davis-announces-resignation-2018-09-27), effective Oct. 1.

BlackBerry(BB.T) shares rose 2.1% in premarket trading after its second-quarter results.

Where are other markets trading?

Major European indexes fell, with Italy suffering its biggest one-day loss (http://www.marketwatch.com/story/italys-stocks-set-for-worst-day-in-about-2-years-as-budget-proposal-sets-up-eu-clash-2018-09-28) in more than two years after its budget issue. Asian stocks mostly rose, with Japan's Nikkei hitting its highest level since 1991 (http://www.marketwatch.com/story/japan-leads-asian-stock-markets-higher-in-bid-to-end-september-on-bright-note-2018-09-27).

Crude-oil prices were flat on the day, while gold was down less than 0.1%. The U.S. dollar index rose 0.4%.

(END) Dow Jones Newswires

September 28, 2018 08:39 ET (12:39 GMT)

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