Russell slips as crude rallies on Gustav

Small-cap stocks edged lower on the opening, pulled down by a big rally in crude oil futures and a mixed bag on this morning’s batch of economic data. At 9:59 a.m. ET, the Russell 2000 (NYSE:IWM) was down 3.91, or 0.52%, at 743.88.

The Michigan sentiment survey came in at 63.0, which was just a tad above the forecast of 62. There was very little stock market response to the Michigan number. The Chicago Purchasing Manager’s Survey topped the forecast in a big way, coming in at 57.9, compared with the projection of 50.0. The stock market rallied off early lows after the stronger-than-expected number, but the bounce off those lows had very little staying power.

Earlier, the personal income report came in below expectations, with the headline figure down 0.7%, compared with expectations for a flat reading. Spending patterns also tailed off as the impact of government stimulus checks faded and the inflation component of the report (the year-over-year PCE price index) was at the highest point in 17 years.

Crude oil prices shot higher into the stock market opening, climbing some $3 a barrel back above $118 as the market braced for Gustav to slam into the Louisiana coast sometime within the next four days. The killer storm ripped through Caribbean, taking nearly 70 lives in the process, and has already prompted a shutdown of energy platforms in the Gulf ahead of the holiday weekend.

Speaking of the holiday, cash trading on stocks will hold normal hours today ahead of Monday’s holiday, but foreign exchange and interest rate futures will close early today at 1:00 p.m. ET, which could start to further taper off volume this afternoon.

The U.S. dollar was weak this morning, down about 0.8% against the yen and about 0.2% versus the euro, which will act as a positive for commodity markets and a negative for equities.

Tech stocks were struggling this morning, with the second-largest PC . . .

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