Monday 25 June 2012

U.S. Stock-Index Futures Decline Before House Sales Data

U.S. stock-index futures fell, indicating the Standard & Poor’s 500 Index will extend last week’s decline, before a report that may show growth in sales of new houses slowed last month.
Bank of America Corp. (BAC) and Goldman Sachs Group Inc. (GS) declined in German trading. Intel Corp. (INTC) lost 0.7 percent after Evercore Partners Inc. said the company may see weaker demand in the third quarter. Grupo Modelo SAB surged 14 percent after a person familiar with the matter said Anheuser-Busch InBev NV may buy the company.
S&P 500 Index futures expiring in September dropped 0.8 percent to 1,316.9 at 6:47 a.m. in New York. The benchmark gauge gained 0.7 percent on June 22 as bank downgrades from Moody’s Investors Service proved no worse than the company had warned about earlier. Dow Jones Industrial Average futures declined 83 points, or 0.7 percent, to 12,485 today.

“Sentiment does appear to have turned in the U.S. in terms of the economy and what’s going to be needed to support it,” said Ioan Smith, a director at Knight Capital Europe Ltd. in London. “Every single data point in the U.S. will now be important because people will start to price in greater expectations of another round of quantitative easing.”
New-house sales in the world’s biggest economy rose less than 1 percent to a 346,000 annual pace in May, according to the Bloomberg survey median. They increased 3.3 percent a month earlier. The Commerce Department will release the data at 10 a.m. in Washington

Other reports this week may show that household spending stalled in May, while the slowdown in job creation damped consumer confidence.
The S&P 500 lost 0.6 percent last week, snapping a two-week rally, after the Federal Reserve cut its economic forecast and a bear market in commodity prices pulled down energy shares

Soros Call

European Union leaders will gather for a summit June 28-29 in Brussels to debate measures for tackling the region’s sovereign-debt crisis.
Billionaire investor George Soros urged Europe to start a fund to buy Italian and Spanish bonds, warning that a failure by leaders to produce drastic measures could spell the demise of the currency.
U.S. financial companies declined in German trading. Bank of America, the second-largest American bank, retreated 1 percent to $7.86, while Goldman Sachs fell 1 percent to $92.72.
Intel slid 0.7 percent to $26.75 after Patrick Wang, an analyst at Evercore wrote in a note that “negative feedback” on the company may lead to weaker demand, affecting second-half earnings. The third quarter may be “sub-seasonal” for semiconductor companies.

Grupo Modelo jumped 14 percent to $7.84 after a person familiar with the matter said AB InBev is close to buying the remainder of the Mexican company for more than $12 billion. AB InBev, the world’s largest brewer, has a non-controlling 50 percent stake in Corona owner Modelo.

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