Futures turn negative as core inflation rises

(Reuters) - U.S. stock futures reverse course to trade lower on Friday after data showed consumer prices moderated in April but core inflation rose, suggesting the Federal Reserve would remain on track to raise interest rates later this year.

The Labor Department said its Consumer Price Index rose 0.1 percent last month, while the so-called core CPI, which strips out food and energy costs, increased 0.3 percent, the largest gain since January 2013.

The data comes a few hours ahead of Fed Chair Janet Yellen's take on the economy that investors will peruse for clues on the timing of a rate hike.

Yellen's speech at 1:00 p.m. ET (1700 GMT) is expected to acknowledge the recent economic sluggishness, including near stagnant performance in the first few months of the year.

The Fed is aiming for inflation at 2 percent before it will consider raising rates, but has said that a significant pick-up is not a precondition to raise rates.

Recent economic data has prompted investors to bet that interest rates will stay near zero till at least the latter part of the year, which has pushed the major stock indexes to record territory over the past couple of weeks.

"There is some conflicting information that is going on inside the marketplace that sort of belies what's happening at the index level," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

"It sort of suggests to me that cautious buyers are pushing equity prices higher."

Both the Dow and the S&P hit new records this week, but have traded in a narrow range and volumes have been subdued as the quarterly earnings season draws to a close.

S&P 500 e-mini futures were down 3.75 points and their fair value ? a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract ? indicated a lower open.

Dow Jones industrial average e-mini futures <1YMc1> fell 23 points and Nasdaq 100 e-mini futures lost 3 points.

Aeropostale slumped 15 percent to $2.2 in premarket trading after the teen apparel retailer estimated a bigger-than-expected quarterly loss.

ELong soared 33.6 percent to $27.65 after Expedia said it sold its entire stake in the Chinese online travel company to Ctrip.com and others. Ctrip was up 5.6 percent at $76 and Expedia 1 percent at $107.

Foot Locker was up 2.8 percent at $65.80 and Deere & Co rose 2.8 percent to $92.01 after the companies posted better-than-expected quarterly profits.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)