U.S. Index Futures Are Little Changed Before Services Report
By Daniela Silberstein
Feb. 3 (Bloomberg) -- U.S. stock-index futures were little changed as investors awaited a report that may show service industries expanded at the fastest pace in more than a year.
Alcoa Inc., the largest U.S. aluminum producer, and Barrick Gold Corp. rose in Germany with metals prices. News Corp. surged 9.8 percent as second-quarter profit beat analysts’ estimates. VeriSign Inc. sank 4.7 percent after reporting fourth-quarter profit that missed analyst estimates. Pfizer Inc. also declined in New York after the drugmaker said fourth-quarter profit missed analyst estimates.
S&P 500 futures expiring in March gained less than 0.1 percent to 1,098 at 12:29 p.m. in London. Dow Jones Industrial Average futures increased 0.1 percent to 10,233 and Nasdaq-100 Index futures rose 0.1 percent to 1,770.75.
“Economic numbers are in the foreground and will be crucial for the market as a lot of the fourth-quarter earnings are already out,” said Gerold Kuehne, who manages $172 million in U.S. equities at LLB Asset Management AG in Vaduz, Liechtenstein. “We’ll keep seeing breakouts to the upside and the downside in the market. Overall sentiment is positive.”
The S&P 500 yesterday capped its biggest two-day rally since October after profit at companies from Lexmark International Inc. to D.R. Horton Inc. topped estimates and pending home sales grew. The measure has surged 63 percent since March as governments and central banks around the world sought to encourage growth by maintaining low interest rates and committing more than $12 trillion to stimulate the economy.
Mohamed A. El-Erian, whose firm runs the world’s biggest mutual fund, said the largest stock market decline in 11 months may worsen amid persistent U.S. joblessness and economic growth that trails analysts’ forecasts.
ISM Data
Investors have wrongly priced in an “orderly” withdrawal of stimulus measures, a rebound in bank lending and coordinated government policy to restore growth, the chief executive officer of Pacific Investment Management Co. wrote in a Bloomberg News column. That means Wall Street projections for gains in 2010 may prove incorrect and prices will slump, he said.
The Institute for Supply Management’s index of non- manufacturing companies, which make up almost 90 percent of the economy, rose to 51 from 49.8 in December, according the median estimate of 75 economists surveyed by Bloomberg News. The report is due at 10 a.m. New York time. Readings above 50 signal growth.
A separate report at 8:15 a.m. may show companies last month cut the fewest jobs in two years. Figures from ADP Employer Services may show private employers cut 30,000 jobs in January, according to the median estimate of economists.
Alcoa
Alcoa added 1.4 percent to $13.86 in Germany. Copper climbed for a third day as U.S. home and auto sales grew and the dollar dropped, improving the outlook for industrial metals demand. Aluminum, zinc, lead and nickel also climbed.
Barrick Gold, the world’s largest gold producer, gained 1 percent to $36.61 as the precious metal gained for a third day.
News Corp. surged 9.8 percent to $14.01. The media company that owns the Twentieth Century Fox film studio and the Wall Street Journal reported second-quarter profit that beat analysts’ estimates and raised its 2010 earnings forecast after “Avatar” broke box-office records.
VeriSign slid 4.7 percent to $22.33. The operator of computers that direct Internet traffic reported fourth-quarter profit excluding some items of 31 cents a share, missing the average analyst estimate in a Bloomberg survey by 10 percent. Deutsche Bank AG downgraded the stock to “hold” from “buy.”
Pfizer
Pfizer Inc. dropped 2 percent to $18.85 in pre-market trading in New York. The world’s biggest drugmaker predicted 2010 adjusted per-share profit of $2.10 to $2.20. Analysts estimated $2.25 in a Bloomberg survey, on average.
Twenty-seven companies on the S&P that are scheduled to report earnings today. Since Jan. 11, about 81 percent of the index’s members have topped the average analyst earnings-per- share estimate, according to Bloomberg data.
McDonald’s Corp. increased 1.7 percent to $65.09. Goldman Sachs Group Inc. added the world’s largest restaurant company to its “conviction buy” list.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
Last Updated: February 3, 2010 07:33 EST
