BLBG:U.S. Stock Futures Fall; Dollar General, Starbucks Drop
U.S. stock futures were little changed as speculation that global policy makers will increase measures to stimulate growth was offset by concern about the economy.
Dollar General Corp., the discount retailer acquired by KKR & Co. in 2007, slipped after reporting a secondary share offering. Starbucks (SBUX) Corp., the world’s largest coffee-shop operator, fell after agreeing to buy Bay Bread LLC. Caterpillar (CAT) Inc. paced gaining shares.
Standard & Poor’s 500 Index futures expiring this month lost 0.2 percent to 1,270.2 at 10:54 a.m. in London. Dow Jones Industrial Average futures fell 0.1 percent, to 12,054.
The S&P 500 reversed losses yesterday as the cheapest price-to-earnings valuation in six months overshadowed a drop in factory orders.
The index started the session trading at 12.9 times its companies’ reported earnings, the lowest valuation since November. It dropped 9.9 percent from a four-year high on April 2 through last week amid concern Europe’s debt crisis was worsening and global economic growth was slowing.
“Possibilities for policymakers to help growth, such as quantitative easing or lowering interest rates, remain,” said Benoit Peloille, equity-market strategist at Natixis in Paris. “There is certainly speculation linked to any new interventions. The market would like to see the central banks intervene, but to me it seems unlikely before the Greek election results.”
Finance ministers and central bank governors from the Group of Seven countries will hold a call today to discuss the euro area’s sovereign-debt crisis, Canadian Finance Minister Jim Flaherty told reporters yesterday in Toronto.
German Chancellor Angela Merkel said systemic banks may need supervision at the European level.
U.S. Services Industry
In the U.S., service industries probably grew in May at the same pace as the prior month, a sign the world’s biggest economy is failing to gain momentum as employment slows and the European crisis intensifies, economists said before a report today.
The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the U.S. economy, held at 53.5, matching April’s four-month low, according to the median forecast of economists surveyed by Bloomberg News. Readings above 50 signal expansion.
Dollar General (DG) slipped 2.5 percent to $47.27 in Germany. The company reported a 25 million-share secondary offering. The shares are being sold by certain existing shareholders and the company won’t receive proceeds from the offer, Dollar General said.
Starbucks fell 1.6 percent to $53.02 in Germany. The company agreed to buy Bay Bread for $100 million in cash, adding to its expanding portfolio of non-coffee businesses.
The acquisition of San Francisco-based Bay Bread and its La Boulange brand will decrease full-year profit by 2 cents a share, the Seattle-based company said.
Caterpillar, the world’s largest maker of construction and mining equipment, climbed 0.4 percent to $83.59, rebounding after four sessions of losses.
To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net.
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