In the U.S.: U.S. Stock Futures Advance as Concern Over Europe Eases

1 October 2012


“It’s one less thing to worry about.” For now!

U.S. stock futures rose, following the biggest weekly decline since June in the Standard & Poor’s 500 Index, as concern about Europe’s debt crisis eased.

Goldman Sachs Group Inc. (GS) advanced 2.3 percent after a report said the stock will rise as much as 25 percent within a year. Ceradyne Inc. (CRDN) jumped 43 percent after 3M Co. (MMM) agreed to buy the company for $860 million to expand its energy unit. Monster Worldwide Inc. (MWW), the Internet recruiting service that is exploring a sale, increased 2 percent after DealReporter said the company is in talks with a private equity bidder.

S&P 500 futures expiring in December added 0.5 percent to 1,440.70 at 9:15 a.m. New York time. Dow Jones Industrial Average futures rose 72 points, or 0.5 percent, to 13,427. The number of shares changing hands in Stoxx Europe 600 Index’s companies was 30 percent above the 30-day average at this time of day, according to data compiled by Bloomberg.

“There’s some carry through from the fact that European shares and Spanish bonds are gaining,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co. He spoke in a phone interview. “It’s one less thing to worry about. People should focus on economic news. Equities end up being the investment of choice.”

Global stocks rose as Spanish bonds gained after stress- test results bolstered confidence in the nation’s banking system. Euro-area manufacturing contracted less than initially estimated in September, Markit Economics said today. Chinese factory output weakened for a second month. Manufacturing in the U.S. probably contracted in September for a fourth straight month. Construction spending likely climbed in August, another report may show.

Weekly Move

Equities fell last week on concern Europe’s debt crisis is worsening and stimulus measures may not be enough to boost economic growth. The S&P 500 (SPX) still climbed 2.4 percent in September for the fourth straight monthly gain, and ended the third quarter with a 5.8 percent advance.

Goldman Sachs advanced 2.3 percent to $116.30. Goldman Sachs is poised to rise as its growth outpaces peers amid a capital market recovery, Barron’s reported, citing Michael Mayo, an analyst at CLSA Ltd.

Ceradyne surged 43 percent to $34.91. 3M expects to complete the deal this quarter, according to a statement today. The board of Ceradyne, which makes technical ceramics used in industries from automotive to solar and defense, has recommended shareholders accept the $35-a-share offer, which is 43 percent higher than the closing price on Sept. 28.

Monster Worldwide rose 2 percent to $7.48. Monster said on March 5 that it hired Stone Key Partners LLC and Bank of America Corp.’s Merrill Lynch to help it review strategic alternatives. DealReporter cited industry people following the matter in its report.

DreamWorks Animation SKG Inc. (DWA) climbed 1.5 percent to $19.51. The company was raised to buy from neutral at Janney Montgomery Scott LLC by equity analyst Tony Wible. The 12-month share-price estimate is $24.

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