In the U.S.: Stock Futures Little Changed Before Open

14 February 2012


Potentially flat start to today’s action. U.S. sales figures pending, Euro-warnings ‘expected.’

U.S. stock-index futures were little changed as German investor confidence increased more than forecast, offsetting a cut to the credit ratings of six European countries by Moody’s Investors Service.

Boeing (BA) Co. advanced after confirming an aircraft order worth $22.4 billion. Chevron Corp., the second-largest U.S. energy company, climbed 1.3 percent as oil rose.

Standard & Poor’s 500 Index futures expiring in March gained less than 0.1 percent to 1,350.2 at 7:30 a.m. in New York before a report on U.S. retail sales. The gauge has rallied 7.5 percent in 2012 as theunemployment rate slid to the lowest in three years. Dow Jones Industrial Average futures added 12 points to 12,847.

“The downgrades were expected,” said Louis de Fels, a Paris-basedmoney manager at Raymond James Asset Management International, which oversees $35 billion worldwide. “It’s a pretext to lock in profits after recent gains. U.S. economic data continues to be a driver. If we have good news later today, the market could rise.”

The U.K. and France may be stripped of their top Aaa ratings, Moody’s said as it reduced the debt rankings of countries including Italy, Spain and Portugal on concern economic weakness may threaten austerity programs and reforms.

Spain was downgraded to A3 from A1, Italy was lowered to A3 from A2, and Portugal was reduced to Ba3 from Ba2, all with negative outlooks, Moody’s said. It also cut Slovakia’s, Slovenia’s and Malta’s ratings.

Italian Debt

Even after the downgrades, Italy’s borrowing costs fell at a debt sale. The Treasury in Rome auctioned 4 billion euros ($5.3 billion) of securities due in November 2014 to yield 3.41 percent, down from 4.83 percent at the last sale of similar- maturity bonds on Jan. 13. It also issued a total 2 billion euros of bonds due in 2015 and 2017.

German investor confidence increased more than economists forecast in February to a 10-month high as global growth improved and Europe’s debt crisis showed signs of abating.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 5.4 from minus 21.6 in January. That’s the highest since April 2011. Economists had forecast a gain to minus 11.8, according to the median of 40 estimates in a Bloomberg News survey.

Retail Sales

Sales at U.S. retailers probably rose in January by the most in four months, led by growing demand for autos, economists said before a report today. The projected 0.8 percent increase would follow a 0.1 percent December advance, according to the median forecast of 82 economists surveyed by Bloomberg News. The Commerce Department will report the sales data at 8:30 a.m. in Washington.

Japan’s central bank unexpectedly added 10 trillion yen ($128 billion) to an asset-purchase program today and set an inflation goal after an economic slide fueled criticism it has been slower to act than counterparts. An asset fund increased to 30 trillion yen, with a credit lending program staying at 35 trillion yen, the Bank of Japan said. The BOJ also said that it will target 1 percent inflation “for the time being.”

U.S. stocks rose yesterday, pushing the S&P 500 less than 1 percent away from its peak nine months ago of 1,363.61. The Nasdaq Composite Index (CCMP) gained 1 percent to the highest level since 2000.

Of the 333 companies in the S&P 500 that have reported earnings since Jan. 9, 70 percent had per-share profit that exceeded estimates, according to data compiled by Bloomberg.

Boeing gained 0.7 percent to $75.40 in Germany. The planemaker confirmed a 230-aircraft order worth $22.4 billion at list prices from Indonesian budget carrier PT Lion Mentari Airlines, setting a record for the planemaker.

Chevron climbed 1.3 percent to $107.80 in New York. Oil advanced to a three-week high in New York on concern that tensions with Iran may hinder Middle East exports.

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