In the U.S.: Stock Futures Fall Amid Europe Concerns

4 January 2012

“Long-term adjustment process” used to describe the recovery needed in Europe. New Year’s optimism may be wearing off quickly.

U.S. stock-index futures fell, after yesterday’s rally, as concern grew that European banks may need to raise more capital amid the region’s sovereign debt crisis.

Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM)dropped at least 0.8 percent, leading declines among financial shares.Caterpillar Inc. (CAT) and Pfizer Inc. (PFE) each fell 1 percent, pacing losses among the largest U.S. companies.

Futures on the Standard & Poor’s 500 Index (SPX) expiring in March slid 0.3 percent to 1,268.90 at 7:55 a.m. in New York. The benchmark gauge advanced 1.6 percent yesterday as data showed manufacturing output increased from China to the U.S. Dow Jones Industrial Average futures expiring the same month slipped 29 points, or 0.2 percent, to 12,309.

“The euro-zone is in a long term adjustment process,” Neil Mellor, a strategist at Bank of New York Mellon Corp. in London, said in a report.

UniCredit SpA, Italy’s largest bank, said it will sell new shares in a 7.5 billion-euro ($9.8 billion) offer to strengthen its capital position. The European Central Bank reported overnight deposits from financial institutions rose to an all- time high and Luxembourg Prime Minister Jean-Claude Juncker said the European Union is facing a recession of unknown scope.

Germany sold 10-year bonds today, getting more bids than the amount for sale and kicking off a competition for financing that may determine whether euro-area leaders can preserve the single currency. Spanish Prime Minister Mariano Rajoy’s government is considering applying for loans from the region’s rescue fund and the International Monetary Fund to aid the country’s financial restructuring, Expansion reported, citing unidentified people with knowledge of the matter.

In the U.S., a Commerce Department report at 10 a.m. New York time may show that bookings for factory equipment (TMNOCHNG) climbed 2 percent in November after a 0.4 percent drop the previous month, according to the median projection of 57 economists in a Bloomberg News survey. Another report may show domestic vehicle sales decreased in December to 10.42 million from 10.53 million in the previous month.


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