U.S. Stock-Index Futures Fall as China Damps Policy Bets
London (Sept 22) U.S. stock-index futures fell, after the Standard & Poor’s 500 Index slipped from a record, as China’s finance minister damped speculation his government will boost stimulus and as investors awaited data on home sales.
Yahoo! Inc. (YHOO) dropped 2 percent in premarket trading after Sanford C. Bernstein & Co. lowered its rating on the Web-portal company. Facebook Inc. and Twitter Inc. slid following Alibaba Group Holding Ltd. (BABA)’s $21.8 billion share sale last week. Sigma-Aldrich Corp. jumped 35 percent after Germany’s Merck KGaA agreed to buy the specialty-chemicals company for $17 billion. Dresser-Rand Group Inc. gained 2.5 percent after Siemens AG agreed to acquire the oil-and-gas equipment maker.
Futures on the S&P 500 (SPX) expiring in December dropped 0.3 percent to 1,997.3 at 7:33 a.m. in New York. The benchmark gauge reached a record on Sept. 18 after the Federal Reserve said it will wait to raise interest rates and Alibaba Group Holding Ltd. made its trading debut, raising a record-breaking $21.8 billion in an initial public offering. Dow Jones Industrial Average contracts slid 37 points, or 0.2 percent, to 17,175, and futures on the Nasdaq 100 Index slipped 0.3 percent today.
“With Alibaba, people are looking at that as a top in the market,” Patrick Spencer, head of U.S. equity sales at Robert W. Baird & Co. in London, said. “I still feel we are in a ‘Goldilocks’ environment with an accommodative Fed, huge buybacks, and another strong earnings-announcement season shortly.”
Chinese Policy
China’s Finance Minister Lou Jiwei said his government won’t make any major policy adjustments in response to changes in individual economic indicators, even as he said growth faces downward pressure. His comments quelled speculation that weaker economic data will spur further stimulus in the world’s second-biggest economy.
A report at 10 a.m. from the National Association of Realtors in Washington may show that purchases of previously owned homes rose to a 5.2 million annualized pace in August from 5.15 million in July, according to economists’ estimates compiled in a Bloomberg survey.
Yahoo declined 2 percent to $40.12. Sanford Bernstein lowered its rating on the Sunnyvale, California-based company to market perform from outperform.
Facebook declined 0.8 percent to $77.27, while Twitter retreated 0.9 percent to $52.50. Google Inc. dropped 0.5 percent to $602.26, while LinkedIn Corp. slipped 0.6 percent to $210.
Alibaba was little changed in early trading. On its Sept. 19 debut, the Chinese e-commerce company surpassed Facebook in market capitalization and was valued at $231 billion.
Walgreen Rating
Walgreen Co. fell 1.5 percent to $61.91. Barclays Plc cut its recommendation on the largest U.S. pharmacy chain to equal weight from overweight. The change is similar to a shift to hold from buy.
Sigma-Aldrich surged 35 percent to $138.05. Darmstadt, Germany-based Merck said it will acquire the company for $140 a share in cash, 37 percent more than Sigma-Aldrich’s closing price on Sept. 19.
EMC Corp. advanced 2 percent to $30.11. The Wall Street Journal reported yesterday, citing people familiar with the matter, that the maker of storage computers is considering options that may include a merger with a rival.
Dresser-Rand climbed 2.5 percent to $81.90. Siemens agreed to buy Dresser-Rand for $7.6 billion including debt and will pay $83 a share in cash. That’s a premium of about 37 percent to Dresser-Rand’s share price in July before reports about a potential bid boosted the stock.
Source: Bloomberg
