By Daniela Silberstein and Whitney Kisling
Dec. 9 (Bloomberg) -- U.S. stock futures fell, indicating the market may halt a two-day advance, after companies from FedEx Corp. to Texas Instruments Inc. forecast earnings that disappointed investors as the recession crimps sales.
FedEx, the second-biggest U.S. package-shipping company, lost 10 percent after projecting profit below analysts’ estimates amid a “significantly weaker” economy. Texas Instruments, the second-largest U.S. chipmaker, and National Semiconductor Corp. slid on waning demand for mobile phones and electronics.
“You’re going to have to get used to this for the next three months, you’re going to see lowering of guidance,” said Robert Lutts, president and chief investment officer at Cabot Money Management, which oversees $400 million in Boston. “This is the real economy.”
Futures on the S&P 500 expiring in December lost 0.7 percent to 898.2 at 9:12 a.m. in New York. Dow Jones Industrial Average futures declined 64 points, or 0.7 percent, to 8,811 and Nasdaq- 100 Index futures slipped 0.8 percent to 1,202.5.
The S&P 500 yesterday extended its gain from an 11-year low last month to 21 percent, marking a technical end to the 13-month bear market, as President-elect Barack Obama pledged the biggest public-works spending package since the 1950s. The benchmark for U.S. equities is still down 38 percent in 2008 after the collapse of subprime mortgages curbed earnings.
European shares rose for a second day and Asian stocks climbed for a third, led by commodity producers and shipping lines, on expectations stimulus plans from the U.S. to India will buoy the global economy.
$1 Trillion
More than $31 trillion has been erased from the value of global equities this year, while debt losses and writedowns at the world’s largest lenders and insurers approach $1 trillion.
Stocks will climb in 2009 in the face of falling earnings and a slowdown in economic growth because of cheap valuations, according to strategists at Credit Suisse Group AG, Deutsche Bank AG and Merrill Lynch & Co. The S&P 500 may rise to 1,050 by the end of 2009 from yesterday’s close price of 909.7, a team of Credit Suisse strategists wrote in a note today. Goldman Sachs Group Inc. chief investment strategist David Kostin projected a 21 percent gain by the end of next year as the economy stabilizes.
Laszlo Birinyi, the investor who accurately predicted this year’s rout in financial shares, said the S&P 500 reached a bear market bottom two weeks ago and recommended buying the largest U.S. stocks.
‘I’d Be Hesitant’
“A bull market is forming, it’s just not going to be any outsized gains over the next three to six months,” he told Bloomberg Television yesterday. “The market is going to do better, but it won’t be up, up and away. With all the concerns and issues around the world, I’d be hesitant about being very, very aggressive.”
FedEx Corp. fell 10 percent to $66.75 after saying annual profit may be as much as one-third lower than analysts expected because of a “significantly weaker” economy.
Texas Instruments slid 2.2 percent to $14.49. Fourth-quarter profit will fall to as little as 10 cents a share, compared with a previous estimate of at least 30 cents, the company said. Sales will be $2.3 billion to $2.5 billion, down from a previous estimate of as much as $3.07 billion.
National Semiconductor, the producer of chips for the five largest mobile-phone makers, lost 1.2 percent to $10.17. Revenue this period will drop about 30 percent from the second quarter ended Nov. 23 as the recession reduced demand for handsets.
Con-Way, Danaher
Con-way Inc., the second-biggest U.S. trucker, reduced its full-year 2008 earnings forecast to as much as 20 percent less than analysts’ average estimate as freight demand fell to 2003 levels. The company also cut 1,450 jobs. The shares slid 6.8 percent to $24.02.
Danaher Corp. fell 1.6 percent to $51.15. The maker of Craftsman tools said fourth-quarter profit will be lower than previously forecast and the company will cut 1,700 jobs.
Fewer Americans probably signed contracts to buy previously owned homes in October as credit markets seized up, signaling the housing slump will extend into a fourth year, economists said before a report today.
The National Association of Realtors’ index of signed purchase agreements for homes dropped 3 percent in October, according to the median estimate of economists surveyed by Bloomberg News. The data is expected at 10 a.m. in Washington.
GM, Ford
General Motors Corp., the largest U.S. automaker whose shares surged 21 percent yesterday, dropped 1.8 percent to $4.84. Congressional Democrats sent President George W. Bush a draft proposal for a $15 billion, short-term aid for U.S. automakers. Some Senate Republicans yesterday expressed doubt about the plan, which is to be voted on in a special session this week.
Ford Motor Co., the second-biggest U.S.-based automaker, declined 3.8 percent to $3.25.
The U.S. government may end up holding stakes in GM, Ford and Chrysler LLC if Congress and the White House reach agreement.
Under the proposed rescue, details of which are still being discussed, the Treasury would get warrants for stock equivalent to 20 percent of any government loans. With GM seeking as much as $10 billion and valued at $3 billion, the government may become the biggest shareholder. The legislation isn’t clear on what kind of holding the government would take, leaving it the option of preferred, common, voting or non-voting shares.
To contact the reporters on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net; Whitney Kisling in New York at wkisling@bloomberg.net.
Posts
No comments:
Post a Comment