In the U.S.: Stock Futures Drop on Europe, China

22 February 2012


Mantra of  ‘cautious optimism’  seems right on target, as China U.K. underwhelm in manufacturing reports.

Dell Inc. (DELL) fell 6.2 percent in pre-market trading after its first-quarter sales forecast missed analyst estimates. Brightpoint Inc. (CELL), a wholesaler of mobile phones, retreated in Germany after cutting full-year earnings forecast.

Futures (SPH2) on the Standard & Poor’s 500 Index expiring in March slid 0.2 percent to 1,357.8 at 7:22 a.m. in New York. Dow Jones Industrial Average futures expiring the same month lost 15 points, or 0.1 percent to 12,930.

“It’s not really what you’d call a very noisy day on the markets,” said Peter Dixon, a global equities economist at Commerzbank AG in London. “We had a fairly disappointing set of data from the PMIs,” he said referring to manufacturing reports from the euro area and Germany.

A euro-area composite index of manufacturing and services industries dropped to 49.7 from 50.4 in January, London-based Markit Economics said in an initial estimate released today. Economists had forecast a reading of 50.5, according to the median of 16 estimates in a Bloomberg News survey.

German services and manufacturing expansion unexpectedly slowed in February, another report showed.

The S&P 500 has rallied 8.4 percent this year on optimism the U.S. economy is recovering and the euro area’s debt crisis will be contained. The Dow topped 13,000 yesterday for the first time since 2008, in intraday trading.

China Manufacturing Data

China’s manufacturing shrank for a fourth month in February, a preliminary report suggests. The flash reading of 49.7 of an index from HSBC Holdings Plc and Markit Economics today compares with a final 48.8 in January. A number below 50 indicates a contraction.

Sales of previously owned U.S. houses probably rose in January to the highest level since May 2010, economists said before a report today. Purchases climbed 1.1 percent to a 4.66 million annual rate from a 4.61 million pace in December, according to the median forecast in a Bloomberg survey.

Dell fell 6.2 percent to $17.08 in early New York trading after the third-largest maker of personal computers said yesterday that first-quarter revenue will decrease 7 percent to $14.9 billion. That trailed the average $15.1 billion estimate of analysts surveyed by Bloomberg.

Brightpoint dropped 4.4 percent to $9.56 in Germany after reducing its forecast for adjusted earnings per share in 2012.

Brocade Communications Systems Inc. (BRCD), a maker of switches for data-storage networks, rose 4.1 percent to $5.72 after reporting a first-quarter revenue of $561 million that beat analysts’ estimates for $542 million.

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