U.S. Index Futures Little Changed as Nike Gains on Profit
London (Sept 26) U.S. stock-index futures were little changed, with equities heading for their worst week in eight, as investors await clues on how the world’s largest economy will cope with higher interest rates from next year.
Nike Inc. jumped 7.5 percent in early New York trading after reporting first-quarter profit that exceeded analysts’ estimates. Foot Locker Inc., which sells Nike products, also rose. Micron Technology Inc. added 5.6 percent after a surge in quarterly sales beat projections. BlackBerry Ltd. climbed 2.9 percent after reporting a smaller-than-expected loss.
Futures on the Standard & Poor’s 500 Index (SPX) expiring in December rose 2 points, or 0.1 percent, to 1,963.6 at 7:28 a.m. in New York, after earlier dropping and rising as much as 0.2 percent. The equity benchmark slumped the most since July yesterday and is heading for its worst week in eight. Contracts on the Dow Jones Industrial Average added 27 points, or 0.2 percent, to 16,927 today.
“This week’s consolidation in U.S. stocks is not surprising,” Francois Savary, chief investment officer of Reyl & Cie., said by phone from Geneva. “The potential for the market is limited for the rest of the year. We don’t foresee the S&P 500 going higher than 2050. There’s still uncertainty regarding the timing of interest-rate hikes -- I think the U.S. economy could surprise on the upside.”
The S&P 500 reached a record on Sept. 18 as the Federal Reserve maintained a commitment to keep interest rates near zero for a considerable time after completing asset purchases. The Fed also said that the timing could move forward if data continues to exceed expectations. Investors are analyzing reports to assess whether economic growth is strong enough to withstand higher interest rates.
The U.S. economy probably expanded in the second quarter at a faster pace that initially estimated, economists predicted before the report, due at 8:30 a.m. in Washington. The Commerce Department’s third reading of gross domestic product will probably show a 4.6 percent pace of growth, revised from its previous estimate of 4.2 percent.
American consumer confidence advanced to the highest level in 14 months in September, data at 9:55 a.m. New York time may show. The Thomson Reuters/University of Michigan final sentiment index probably rose to 84.8 this month, compared with a preliminary reading of 84.6, economists forecast.
Economic reports on employment and output from the manufacturing and services industries are due next week.
Nike Inc. rallied 7.5 percent to $85.70. Net income in the quarter ended Aug. 31 rose 23 percent to $962 million, or $1.09 a share, the company said late yesterday in a statement. Analysts had predicted EPS of 88 cents on average.
Foot Locker climbed 0.7 percent to $56.45.
Micron Technology added 5.6 percent to $33.49. The largest U.S. maker of computer-memory chips said fourth-quarter sales climbed to $4.23 billion, while profit excluding some costs was 82 cents a share. Analysts had predicted sales of $4.16 billion and profit of 81 cents. Micron’s forecast for revenue in the current period also exceeded the average estimate.
BlackBerry advanced 2.9 percent to $10.08. BlackBerry posted a second-quarter net loss of 2 cents a share, narrower than the 16-cent loss projected by analysts.
SOURCE: BLOOMBERG
