BLBG: U.S. Stock-Index Futures Advance as GM Rises; Asian Shares Gain
U.S. stock futures rose, indicating the Standard & Poor’s 500 Index may trim its weekly drop, after the Federal Reserve approved GMAC LLC’s bid to become a bank holding company. Asian shares advanced for a second day.
General Motors Corp. climbed 13 percent as GMAC’s shift to a bank eases the threat of a default that threatened to dry up credit for GM dealers. Best Buy Co. slipped 1.3 percent after data from SpendingPulse showed U.S. holiday spending was the lowest since at least 2002.
S&P 500 futures expiring in March added 0.7 percent to 870.70 at 7:43 a.m. in New York. Dow Jones Industrial Average futures climbed 54 points, or 0.6 percent, to 8,477. The MSCI Asia Pacific Index advanced 0.5 percent on speculation takeovers and higher memory-chip prices will help the technology industry overcome slowing economic growth. Western European markets were shut.
The S&P 500 has lost 2.2 percent during the holiday- shortened week, extending its 2008 slide to 41 percent as home prices plunged, the government confirmed the economy contracted by the most since 2001 last quarter and the outlook for corporate earnings deteriorated. Trading on Dec. 24 was the slowest in five years, while the New York Stock Exchange and Nasdaq Stock Market were closed yesterday for Christmas.
Markets were closed in western Europe, Australia, Hong Kong, New Zealand and the Philippines, while Dec. 25 and today were Japan’s two slowest full days of trading in the past five years.
GM advanced 13 percent to $3.67. The Fed used emergency powers to grant GMAC’s bank conversion, citing turmoil in financial markets and the potential impact on GM as the biggest U.S. automaker taps emergency federal loans to stay in business.
GM Dealers
GMAC’s shift to a bank eases the threat of a default that threatened to dry up credit for GM dealers who used the company to finance about three-quarters of their inventory. GMAC also handled loans for about 35 percent of GM’s 2007 retail buyers.
Best Buy, the largest U.S. electronics retailer, declined 1.3 percent to $26.36.
Cutbacks on clothing, electronics and jewelry sent U.S. retail sales tumbling this holiday season as consumers limited purchases to necessities. Spending was the lowest since MasterCard Advisors started tracking data in 2002 to provide the SpendingPulse service, Michael McNamara, vice president of research and analysis, said in an interview yesterday. He estimated sales, excluding autos and gasoline, fell 2 percent to 4 percent from Nov. 1 to Dec. 24.
Retailers including Macy’s and AnnTaylor have responded by increasing markdowns, which stand to hurt profit margins in what may be the weakest holiday spending season in four decades.
Christmas Gains
The U.S. stock market historically performs better during the Christmas week, according to Bespoke Investment Group LLC. The Dow average has risen an average 0.7 percent during the holiday season, compared with a 0.1 percent advance for all 4-day periods, data since 1900 from the Harrison, New York-based research firm show.
Exxon Mobil Corp., the biggest U.S. energy company, may advance. Oil rose for the first time in three days after the U.A.E. said it would cut output to comply with OPEC’s supply curbs. Crude for February delivery gained 2.8 percent to $36.33 a barrel in New York.
New York Times Co. shares may move. The newspaper publisher is “actively” seeking a buyer for its 17.5 percent stake in New England Sports Ventures, which owns the Boston Red Sox baseball team, the Wall Street Journal reported, citing two people familiar with the discussions. Barclays Plc estimates the stake is worth $166 million, the newspaper reported.
