Stocks Dropped at the Open

U.S. stocks opened sharply lower on Friday, as investors found little comfort from consumer spending data. The Dow Jones Industrial Average lately fell 181.36 points, or 1.14%, to 15,667.25. The S&P 500 lost 16.85 points, or 0.94%, lower at 1,777.34. The Nasdaq Composite was down 36.99 points, or 0.90%, at 4,086.14.

U.S. consumer spending rose more than expected in December, but weak income growth suggested the economy could cool off in the first quarter. The Commerce Department said on Friday that consumer spending increased 0.4 percent after rising by a revised 0.6 percent in November.

The employment cost index, which measures the price of U.S. labor, rose 0.5% in the fourth quarter. Economists polled by MarketWatch expected a seasonally adjusted 0.4% gain, following a 0.4% increase in the third quarter. Over the past 12 months, employment costs have 2%, up a notch from the third-quarter rate of 1.9%, the Bureau of Labor Statistics said Friday.

The U.S. State Department is poised to issue an environmental review of the proposed Keystone XL oil pipeline that will likely say the project will not appreciably increase carbon emissions, sources said late Thursday,
forcing President Barack Obama closer to a tough decision.

Wal-Mart said on Friday that its fiscal fourth-quarter and full-year adjusted earnings from continuing operations may come in at or slightly below the low end of its prior forecasts. Wal-Mart previously projected fourth-quarter adjusted earnings from continuing operations between $1.60 and $1.70 per share. Its 2014 guidance was for $5.11 to $5.21 per share.