In the U.S.: U.S. Stock Futures Fluctuate As Valuation Tempers Europe

5 June 2012

The rest of the world waits on Europe to bury their demons. I suspect this might take a while.

U.S. stock futures fluctuated as the cheapest valuation in six months for the Standard & Poor’s 500 Index tempered concern about Europe’s debt crisis.

Marvell Technology Group Ltd. (MRVL) rose 1.1 percent as JMP Securities LLC raised its recommendation for the shares.Starbucks Corp. (SBUX), the world’s largest coffee-shop operator, decreased 2.6 percent after agreeing to buy Bay Bread LLC for $100 million in cash. Dollar General Corp. (DG), a discount retailer, dropped 4.1 percent after reporting a secondary share offering.

S&P 500 futures expiring in June rose less than 0.1 percent to 1,273.2 at 8:58 a.m. New York time. Dow Jones Industrial Average futures gained 14 points, or 0.1 percent, to 12,077.

Finance ministers and central bank governors from Group of Seven countries plan to hold a call today to discuss Europe’s worsening sovereign-debt crisis. Spain called for outside support for the first time to battle the financial crisis as Budget Minister Cristobal Montoro said European institutions should help shore up the nation’s lenders. Euro-area services and manufacturing output contracted, while service industries probably grew in May at the same pace as the prior month.

The S&P 500 traded at 12.9 times its companies’ reported earnings, the lowest valuation since November, according to data compiled by Bloomberg. Yesterday, the index briefly extended a decline from its peak in April to more than 10 percent as government data showed factory orders unexpectedly decreased.

Marvell Technology rallied 1.1 percent to $12.15. The company was raised to market perform at JMP Securities by equity analyst Alex Gauna.

Starbucks declined 2.6 percent to $52.50. The purchase of San Francisco-based Bay Bread and its La Boulange brand will decrease full-year profit by 2 cents a share, the Seattle-based company said in a statement yesterday. The French-themed bakery sells homemade granola, flank steak sandwiches and organic bread, according to its website.

Dollar General lost 4.1 percent to $46.50 after reporting a 25 million secondary share offering.


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