U.S. Stock Futures Advance; GM and Ford Shares Climb in Europe
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By Adria Cimino
Dec. 11 (Bloomberg) -- U.S. stock-index futures advanced as Democratic leaders and the Bush administration worked to beat a deadline to save General Motors Corp., Chrysler LLC and the millions of jobs dependent on the automobile industry.
GM climbed 4.3 percent in Germany, while Ford Motor Co. added 1.2 percent. The U.S. House voted 237-170 last night to approve emergency loans for GM and Chrysler, shifting the focus to the Senate, where Republican opposition threatens to delay or kill the legislation. Occidental Petroleum Corp., the fourth- largest U.S. energy company, climbed 1.2 percent as oil rose.
The Standard & Poor’s 500 Index this week marked a technical end to a 14-month bear market as President-elect Barack Obama stepped up efforts to pull the economy out of a recession. A Labor Department report today may show that more than half a million workers sought jobless benefits for the first time last week.
S&P 500 futures expiring this month added 0.4 percent to 899 at 11:57 a.m. in London after earlier falling as much as 1.1 percent. Dow Jones Industrial Average futures rose 0.5 percent to 8,756 and Nasdaq-100 Index futures gained 0.8 percent to 1,226.25.
Futures pared their advance after Eli Lilly and Co. said it sees 2009 earnings per share of $4.00 to $4.25, below the consensus estimate of $4.27.
Europe, Asia, VIX
Europe’s Dow Jones Stoxx 600 Index fell 0.5 percent as concern that the economic slowdown from China to America is deepening weighed on automakers, overshadowing a rally in oil producers. The MSCI Asia Pacific Index rose for a fifth day, the longest winning streak in seven months, as South Korea cut interest rates to a record low.
The VIX, which measures the cost of using options as insurance against declines in the S&P 500, has dropped 31 percent since Nov. 20, when it rose to 80.86, the highest in its 18-year history. The S&P 500 added 20 percent since Nov. 20.
The benchmark for U.S. equities has still tumbled 43 percent from its 2007 record as the collapse of the subprime mortgage market curbed earnings for five straight quarters.
The S&P 500’s companies reported an average 18 percent decline in profits in the third quarter, prompting analysts to cut estimates for next year. They now project profit growth of 8.2 percent for S&P 500 companies in 2009, about one-third of their forecast of 23 percent at the end of the third quarter, according to data compiled by Bloomberg.
GM, Ford
GM added 4.3 percent to $4.80 in Germany, while Ford gained 1.2 percent to $3.29. Democratic leaders and the Bush administration are trying to beat a deadline to save the companies and the millions of jobs dependent on the industry before GM and Chrysler burn through their remaining cash. For GM, that could be in three weeks.
A Labor Department report at 8:30 a.m. in Washington may show that, for a fifth consecutive week, more than half a million workers sought jobless benefits for the first time as the job market weakened. U.S. employers have cut 1.9 million workers from payrolls so far this year.
Occidental Petroleum climbed 1.2 percent to $57.96. Crude rose after Saudi Arabia said it is producing near its OPEC target, a sign the world’s biggest exporter is complying with supply cuts agreed by the group in October. The contract for January delivery rose as much as 5.5 percent to $45.93 on the New York Mercantile Exchange.
Merck & Co. slipped 1.9 percent to $26.48 in France. The third-largest U.S. drugmaker faces a new trial over the death of a former user of the company’s Vioxx painkiller that resulted in a $32 million award against the company. A Texas state appeals court in San Antonio today said it erred in May by throwing out the award to Leonel Garza’s family on evidentiary grounds.
A report at 8:30 a.m. may show the U.S. trade deficit narrowed in October to the lowest level in three years as plunging oil prices led to a drop in imports. The gap shrank 5.3 percent to $53.5 billion, the smallest since March 2005, according to the median forecast of economists surveyed by Bloomberg News.
To contact the reporter on this story: Adria Cimino in Paris at
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