By Rita Nazareth - Dec 1, 2011 9:20 PM GMT+0700
Dec. 1 (Bloomberg) -- Troy Gayeski, senior portfolio manager at SkyBridge Capital LLC, talks about the outlook for global markets and investment strategy. He speaks with Scarlet Fu on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
U.S. stock futures fell, following the biggest three-day gain in the Standard & Poor’s 500 Index since March 2009, as an increase in jobless claims and weaker manufacturing in China raised concern about global growth.
Target Corp. (TGT) lost 1.8 percent after November sales at the discount retailer missed estimates. Hewlett-Packard Co. slid 1.1 percent after S&P cut its credit ratings for the computer maker. Yahoo (YHOO)! Inc. added 3.8 percent as a group including Alibaba Group Holding Ltd. is said to prepare a bid for all of the company. Walt Disney Co., owner of the namesake theme parks, rose 0.7 percent after boosting its dividend 50 percent.
S&P 500 futures expiring in December dropped 0.2 percent to 1,243.20 at 9:15 a.m. New York time. The gauge rallied 7.6 percent over the previous three days. Dow Jones Industrial Average futures lost 30 points, or 0.3 percent, to 12,004. The index yesterday posted the biggest gain since 2009.
“Today’s data raise a yellow flag for the economy,” Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, said in a telephone interview. “China is slowing and jobless claims numbers were not good. In addition, Europe is still a concern for the world.”
The S&P 500 rose 4.3 percent yesterday as six central banks took action on Europe’s debt crisis by making it cheaper for lenders to borrow in dollars and after China lowered banks’ reserve requirements. It was the ninth time since the beginning of 2010 that the index rallied more than 3 percent in one day, according to data compiled by Birinyi Associates Inc. Following similar gains, the measure has fallen six out of eight previous instances when the market opened, the data showed.
Economic Data
Stock-futures fell today after a report showed that more Americans than forecast filed applications for unemployment benefits during the holiday-shortened week, signaling limited recovery in the labor market. A purchasing managers’ index compiled by the China Federation of Logistics and Purchasing slid to 49 in November, lower than all but two of 18 forecasts in a Bloomberg News survey.
Spain and France sold 8.1 billion euros ($10.9 billion) of bonds today, sending yields lower across Europe. The European Union may exempt bank debt issued before 2013 from proposals forcing investors to take losses at failing lenders, said a person familiar with the plan. Excluding the debt is designed to prevent lenders’ funding costs from rising, said the person.
“The market may be too occupied with action in Europe, but China concerns are not too far back in everyone’s mind,” said Manish Singh, the London-based head of investment at Crossbridge Capital, which has more than $2 billion under management.
Target Slumps
Target lost 1.8 percent to $51.77. The second-largest U.S. discount retailer said November same-store sales rose 1.8 percent, missing an estimated 2.9 percent increase.
Hewlett-Packard (HPQ) dropped 1.1 percent to $27.64. The largest computer maker had its corporate credit and senior unsecured ratings cut to BBB+ from A by S&P, which cited reduced financial flexibility caused in part by the use of debt to fund the acquisition of Autonomy. The company’s “inconsistent” strategies and management turnover may also have increased operational risk, S&P said. The outlook on the ratings is stable.
Yahoo rallied 3.8 percent to $16.31. Alibaba Group and Softbank Corp. (9984) are in advanced talks with Blackstone Group LP (BX) and Bain Capital LLC about making a bid for all of Yahoo, said three people with knowledge of the matter. A bid may value Yahoo at more than $20 a share because of tax savings tied to the Internet company’s stakes in Alibaba and Yahoo Japan, said two of the people, who declined to be identified.
Disney gained 0.7 percent to $36.11. The new 60-cent annual dividend (DIS), up from 40 cents, will be paid on Jan. 18 to shareholders of record as of Dec. 16, the Burbank, California- based company said yesterday in a statement.
Limited Brands Inc. (LTD) jumped 2.5 percent to $43.40. The owner of the Victoria’s Secret lingerie chain said November comparable-store sales increased 7 percent, beating a 4.9 percent estimated gain. The retailer said it will pay a $2 special dividend to shareholders as of Dec. 12.
To contact the reporter on this story: Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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