INSTANT VIEW: U.S. trade gap narrows for sixth month

NEW YORK (Reuters) - The U.S. trade deficit shrank 9.7 percent in January to its smallest since October 2002, as both imports and exports tumbled for the sixth consecutive month in the face of shrinking global demand, a U.S. government report showed on Friday.

U.S. import prices fell by a smaller-than-expected margin in February as petroleum costs rebounded for the first time in six months, a government report showed on Friday.

KEY POINTS

TRADE GAP: * The monthly trade gap totaled $36.0 billion, below a Wall Street consensus estimate of $38.0 billion before the report. * The deficit has now narrowed for a record six consecutive months, the longest previous run being from April through August 2007. * U.S. exports of goods and services fell 5.7 percent from December to the lowest since September 2006 and imports tumbled 6.7 percent to lowest since March 2005.

IMPORT PRICES: * The Labor Department said import prices slipped 0.2 percent, the smallest decrease since last July, after falling by a revised 1.2 percent in January. * The February drop was smaller than market expectations for a 0.8 percent decline. * Imported petroleum prices rose 3.9 percent in February, advancing for the first time since last July, after dropping by 4.2 percent the prior month.

COMMENTS:

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM, WEST CHESTER, PENNSYLVANIA:

"The narrowing reflects the ongoing economic downturn. U.S. consumers are pulling back and that's resulting in fewer imports while exports are falling.

"The narrowing of the trade deficits is helpful to the U.S. economy, but it reflects how bad economic conditions are everywhere."

PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK & CO, NEW YORK:

"Well the international trade number is $2 billion less than expected, but I don't think it will change anyone's mind about anything. Also, it's a January number and somewhat dated, so I don't think it will have much relevance for today's trading."

MARKET REACTION: STOCKS: U.S. equity index futures hold gains after data. BONDS: U.S. Treasury debt prices hold losses. DOLLAR: U.S. dollar extends losses versus euro.