In the U.S.: Futures Advance Before Manufacturing Data

15 December 2011

As jobless claims among other data come in, investors remain very watchful even with a lift in European markets.

U.S. stock futures rose, indicating the Standard & Poor’s 500 Index (SPX) will snap a three-day drop, as Spain sold more debt than it had planned and investors awaited reports that may show manufacturing expanded at a faster pace.

Novellus Systems Inc. (NVLS) surged 22 percent after Lam Research Corp. (LRCX) agreed to acquire the company. Bank of America Corp., the second-largest U.S. bank by assets (BAC), gained 1.5 percent. BioSante Pharmaceuticals Inc. (BPAX), the developer of hormone-replacement products, plunged 75 percent in early New York trading after studies showed that women treated with its LibiGel compound failed to have more frequent sexual encounters.

Futures on the S&P 500 expiring in March gained 0.7 percent to 1,214.4 at 7:21 a.m. in New York. Dow Jones Industrial Average Index futures expiring the same month added 70 points, or 0.6 percent, to 11,832.

“Today’s a very important day in terms of data,” said John Plassard, director at Louis Capital Markets in Geneva. “Investors will carefully monitor two important numbers: the new jobless claims and the Fed’s manufacturing data. Americans know better than anyone else that confidence is the engine of growth. Good results today could help restore some of the much- needed confidence.”

The S&P 500 dropped 1.1 percent yesterday as growing funding stress in the euro area fueled concern that the region is struggling to contain its sovereign-debt crisis.

Spain sold 6 billion euros ($7.8 billion) of bonds due in 2016, 2020, and 2021 at a debt sale today, almost double its 3.5 billion-euro target.

New York Manufacturing

The Federal Reserve Bank of New York’s general economic index, due at 8:30 a.m. New York time, probably accelerated to 3 in December from 0.6 in November, according to the median forecast in a Bloomberg News survey of economists. Readings greater than zero show companies in the so-called Empire State Index are boosting output.

A report at at 10 a.m. may show that manufacturing in the Philadelphia region expanded at a faster pace in December. The Federal Reserve Bank of Philadelphia’s general economic index increased to 5 from 3.6 in November, according to the median forecast of 56 economists in a Bloomberg News survey.

A release at 8:30 a.m. may show that initial claims for unemployment insurance rose to 390,000 last week from 381,000 the previous week.

In Europe, data showed that gauges of manufacturing output in Germany and France contracted this month less than economists had estimated. Services output unexpectedly rose in both countries, climbing to 50.2 in France.

‘There Is Hope’

“French services output is above 50, which gives the markets hope,” said Plassard. “As long as there is hope, a little bit of confidence will be restored in the markets.”

Novellus Systems surged 22 percent to $42.50 in early New York trading after Lam Research agreed to buy the company for about $3.3 billion in stock, valuing it at $44.42 a share. Lam Research fell 3 percent to $38.29 in New York.

Bank of America gained 1.5 percent to $5.31 in early New York trading, while Chevron Corp., the second-largest U.S. oil provider (CVX), rose 0.4 percent to $100.96 in German trading after it reported its 12th natural-gas discovery off the coast of Australia since the middle of 2009.

Skyworks Solutions Inc. (SWKS) added 2.9 percent to $14.45 as Jonathan Goldberg, an analyst at Deutsche Bank AG, raised the wireless semiconductor company’s shares to “buy” from “hold.”

BioSante Pharmaceuticals slumped 75 percent to 54 cents in early New York trading after its LibiGel experimental compound intended to increase women’s libido failed to work in two large studies.

Jason Butler, an analyst at JMP Securities LLC cut the stock to “market perform” from “market outperform.”

Freeport-McMoRan Copper & Gold Inc. (FCX), the biggest publicly traded copper producer, rose 0.5 percent to $37.61 in New York.


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