U.S. Stock Futures Trim Gains After Jobless Claims, Retail Sales Reports

By Michael P. Regan - Jan 12, 2012 8:33 PM GMT+0700

U.S. stock futures trimmed gains after government data showed retail sales trailed projections and jobless claims increased more than forecast, damping optimism in the economic outlook.

Futures on the Standard & Poor’s 500 Index expiring in March were up 0.2 percent at 1,290.3 at 8:32 a.m. in New York after climbing as much as 0.7 percent.

Jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, Labor Department figures showed. The median forecast of 46 economists in a Bloomberg News survey projected 375,000. Retail sales climbed 0.1 percent in December following a 0.4 percent advance in November that was more than initially reported, Commerce Department figures showed. Economists forecast a 0.3 percent December rise, according to the median estimate in a Bloomberg News survey. Purchases excluding automobiles fell 0.2 percent.

U.S. futures followed European shares higher earlier today as Spain sold 10 billion euros ($13 billion) of bonds, twice the target for the sale, while Italy sold 12 billion euros of bills, easing concerns the countries would struggle to finance their debts. The European Central Bank held interest rates steady after two straight cuts as signs of respite from the sovereign debt crisis gave it scope to pause.

Most (.ADLR) U.S. stocks advanced yesterday as a rally in banks helped the market recover from an early slump spurred by growing signs Europe may slip into a recession. The S&P 500 has risen 2.8 percent in 2012 through yesterday as commodity, financial and industrial companies had the biggest gains among 10 groups.

Earnings Season

JPMorgan Chase & Co. will be the second company in the Dow to release fourth-quarter results, with the largest U.S. bank scheduled to report before markets open tomorrow. JPMorgan is projected to post a record $18.5 billion in 2011 profit when adjusted for one-time items, a 6 percent increase, according to a survey of analysts by Bloomberg.

Earnings season will accelerate next week with 48 companies in the S&P 500 reporting and six Dow members, including Bank of America Corp., Intel Corp. and General Electric Co.

Forecast earnings growth of 6 percent in the final three months of 2011 would mark the slowest increase since the third quarter of 2009, according to data compiled by Bloomberg. Analysts predict energy companies will post 21 percent growth to lead gains, with profits climbing 7.6 percent at industrial companies and 6.8 percent at technology companies. Raw-material producers and telephone companies are forecast to show declines in earnings.

Financial companies are projected to report 3.9 percent earnings growth, with profits up 21 percent at banks and down the same amount at diversified financial firms, according to a compilation of analysts’ estimates. Some analysts are predicting Goldman Sachs Group Inc. will post its lowest annual profit since the firm went public after its trading business contracted as investors become more cautious and regulators demand banks hold more capital and curb proprietary bets.

To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomberg.net