In the U.S.: U.S. Stock-Index Futures Drop Before Factory-Orders Data

3 April 2012


After the “best start to a year since 1998,” “it’ll be much easier for data to disappoint this week.”

U.S. stock-index futures retreated, indicating the Standard & Poor’s 500 Index will decline from the highest level in almost four years, as investors awaited a report on factory orders.

Netflix Inc. (NFLX), the online movie service, fell 2.4 percent in pre-market New York trading as Barclays Plc downgraded the shares. Illumina Inc. (ILMN) rose 1.7 percent in German trading after the maker of gene-mapping tools rejected an increased takeover bid from Roche Holdings AG.

S&P 500 (SPM2)futures expiring in June declined 0.3 percent to 1,408.8 at 7:23 a.m. in New York. The index climbed to the highest level since May 2008 yesterday after a report showed stronger-than-forecast growth in U.S. manufacturing. Dow Jones Industrial Average futures slipped 29 points, or 0.2 percent, to 13,160 today.

“After the strong rally it’ll be much easier for data to disappoint this week than to deliver a positive surprise,” said Mads Koefoed, a macro strategist at Saxo Bank A/S in Copenhagen. “For now, investors will be scrutinizing data to see how strong the seasonal factor from the mild winter was.”

A Commerce Department report at 10 a.m. in Washington will probably show that factory ordersrose 1.5 percent in February, according to the median of 60 economists’ projections in a Bloomberg survey. They dropped 1 percent in January.

Fed Minutes

The Federal Open Market Committee will release minutes today of its March 13 meeting, when policy makers raised their assessment of the economy and repeated that “exceptionally low”interest rates may be needed through late 2014.

U.S. stocks rose yesterday as manufacturing in the U.S. expanded at a faster pace than forecast in March, signaling that the industry is weathering slower global growth. The S&P 500rose 12 percent in the first quarter, the best start to a year since 1998, as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis.

Netflix sank 2.4 percent to $111.20 after being downgraded to equal weight from overweight at Barclays, meaning investors should no longer hold more of the shares than represented in benchmark indexes.

Illumina rose 1.7 percent to $52.25. The company urged shareholders to reject an increased hostile bid from Roche, saying it “dramatically undervalues” the firm. Roche raised its offer last week by 15 percent to about $6.7 billion, or $51 a share, after Illumina rejected the original approach.

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