European Stock Futures Are Little Changed; U.S. Futures Drop

By Daniela Silberstein

Aug. 5 (Bloomberg) -- European stock futures were little changed after Societe Generale SA posted earnings that beat estimates, while Swiss Reinsurance Co. reported an unexpected loss. U.S. index futures and Asian shares declined.

Societe Generale, France’s second-largest bank by market value, and Axa SA may move after posting smaller-than-estimated declines in profit. Swiss Re, the world’s second-biggest reinsurer, may be active after reporting a loss of 381 million Swiss francs ($359 billion).

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, added less than 0.1 percent to 2,670 at 7:21 a.m. in London.

Standard & Poor’s 500 Index futures slipped 0.4 percent before reports on employment, service industries and factory orders. The benchmark gauge for U.S. equities yesterday rose for a fourth day as a bigger-than-estimated increase in pending sales of existing homes overshadowed speculation that the market’s five-month rally has made stocks too expensive.

The MSCI Asia Pacific Index fell 0.7 percent today as losses from Isuzu Motors Ltd. and Elpida Memory Inc. dragged auto and technology companies lower.

“A positive end to the session in the U.S. failed to give Asian markets a lift and may not be too much of a help for European markets,” Jimmy Yates, head of equities at CMC Markets in London, wrote. “There is a lot of data due for release today that has the potential to cause a degree of volatility. The headline numbers will come from the corporate calendar where the financial stocks yet again take centre stage.”

Five-Month Rally

Europe’s Stoxx 600 has climbed 44 percent since March 9 as companies from Goldman Sachs Group Inc. to Roche Holding AG reported better-than-estimated earnings. The gauge is now valued at 37.5 times the profits of its companies, the highest level since September 2003, weekly data compiled by Bloomberg show.

Societe Generale may be active after the bank reported second-quarter profit of 309 million euros ($445 million), exceeding the 68 million-euro median estimate of 16 analysts surveyed by Bloomberg.

Axa, Europe’s second-biggest insurer, said first-half profit dropped 39 percent, less than analysts estimated, on lower fees from asset management and as the financial crisis curbed demand for life-insurance policies.

Swiss Re said it had a net loss in the second quarter on impairments on securitized products and the cost of hedging corporate bonds.

Lloyds Banking Group Plc, the British lender that acquired HBOS Plc in January, posted a first-half loss of 3.1 billion pounds ($5.2 billion) because of writedowns on corporate and real estate loans.

Adidas, Deutsche Boerse

Adidas AG may be active after the second-largest sporting- goods maker said second-quarter profit slumped as demand fell. The company also said it is reorganizing its management board duties and Chief Executive Officer Herbert Hainer will assume direct responsibility for global sales.

Deutsche Boerse AG may decline. Europe’s largest exchange by market value said second-quarter profit fell 34 percent as revenue from stock and derivative trading dropped.

Isuzu sank 4.7 percent to 163 yen as Japan’s largest maker of light-duty trucks reported a net loss of 16.6 billion yen ($170 million) in the quarter ended June 30. Elpida slumped 3.2 percent to 1,138 yen after Japan’s biggest computer-memory chipmaker reported a 44.5 billion yen loss.

Economic Reports

Service industries in the U.S. probably shrank at a slower pace in July, bringing the economy closer to emerging from the worst recession in eight decades, economists said before a report today.

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 48, the highest level in 10 months, from 47 in June, according to the median forecast of 77 economists surveyed by Bloomberg News. Readings less than 50 signal contraction.

A separate U.S. report from ADP Employer Services may show companies cut 350,000 workers from payrolls in July, the smallest reduction since September, according to economists surveyed, while data from the Commerce Department may show factory orders dropped 0.8 percent in June.

U.K. consumer confidence rose to the highest level in more than a year last month as house prices stopped falling, Nationwide Building Society said today.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.