In the U.S.: U.S. Stock Futures Are Little Changed; Microsoft Falls

3 July 2012

Today’s shortened trading period looks to be a quiet one…factory data pending.

U.S. stock-index futures were little changed, indicating equities will halt a two-day rally that took the benchmark Standard & Poor’s 500 Index to an almost two-month high, as investors awaited a report on factory orders.

Microsoft Corp. (MSFT) fell 1.9 percent in early New York trading after taking a $6.2 billion writedown on its Internet- advertising company, AQuantive Inc. MModal Inc. (MODL) may be active after it agreed to be bought by a JPMorgan Chase & Co. unit for about $1.1 billion.

S&P 500 Index futures expiring in September dropped less than 0.1 percent to 1,356.7 at 6:40 a.m. in New York. The benchmark gauge yesterday rose to the highest since May 7, as news of takeovers outweighed worse-than-forecast manufacturing data. Futures on the Dow Jones Industrial Average dropped 10 points, less than 0.1 percent, to 12,766 today.

“U.S. factory orders for May will give another indication about the prospects of the U.S. economy,” Michael Koehler, a strategist at Landesbank Baden-Wuerttemberg in Stuttgart, wrote in a note. “Today’s trading volume should be rather low due to tomorrow’s U.S. holiday and ahead of the U.S. labor-market data on Friday.”

A Commerce Department report at 10 a.m. in Washington may show that orders to factoriesgained 0.1 percent in May after the first back-to-back declines in March and April in more than three years.

The U.S. markets will be closed for Independence Day holiday tomorrow. A July 6 report may show employers increased payrolls by 90,000 workers in June after a 69,000 gain in May, according to the median forecast of 59 economists surveyed by Bloomberg News.

Microsoft Writedown

Microsoft fell 1.9 percent to $29.99 in early New York trading. The world’s largest software company is taking a $6.2 billion writedown for almost the entire amount it paid for Internet-advertising company AQuantive, signaling that its online division will perform worse than the company projected.

The non-cash charge means the company will probably post a loss for the quarter, which ended in June. Before yesterday’s statement, analysts had predicted that Microsoft would report profit of $5.3 billion in the period, data compiled by Bloomberg show.

MModal may be active. The provider of medical document processing technology said One Equity Partners, JPMorgan’s private-investment arm, will pay $14 a share in cash for the company. MModal’s board accepted the offer, to be made in a tender on or before July 17 and expected to be completed by September.

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