BLBG:U.S. Stock Futures Rise Ahead of Confidence, Housing Data
U.S. stock futures increased, following a three-day decline for the Standard & Poor’s 500 Index, before reports that are projected to show improvement in American consumer confidence and the housing market.
Facebook Inc. (FB) rose 1 percent after yesterday plunging 9.1 percent. Caterpillar Inc. (CAT), the world’s biggest construction and mining equipment maker, fell 1.8 percent after cutting its forecast for 2015 earnings as commodity producers reduced capital expenditure. Red Hat Inc. (RHT), the largest seller of the open-source Linux operating system, dropped 3 percent as profit missed estimates and the company pared sales forecasts.
S&P 500 futures expiring in December rose 0.2 percent to 1,453.80 at 8:21 a.m. New York time. Dow Jones Industrial Average futures added 28 points, or 0.2 percent, to 13,517. The number of shares changing hands in Stoxx Europe 600 Index’s companies was 13 percent lower than the 30-day average at this time of day, according to data compiled by Bloomberg.
“Markets are not seeing too much of a move as investors are waiting for U.S. data,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. in London. “Consumer sentiment is typically geared towards the labor market, which isn’t improving at the pace everyone wants. So markets are looking for a slight improvement. With the home-price data, investors want to continue seeing signs of stability.”
An index from S&P/Case-Shiller may show home prices in 20 U.S. cities rose 1.1 percent in July from the year-before period, the biggest gain since August 2010, according to a Bloomberg survey of economists. The Conference Board’s index of consumer confidence probably increased to 63.2 in September from 60.6 in August, a separate poll showed.
Seven Weeks
The S&P 500 yesterday had the longest decline in seven weeks as European leaders clashed on ways to stem the debt crisis and data from China and Germany signaled the slowdown is deepening. The index was still up 16 percent this year amid better-than-estimated earnings, rising consumer confidence and home sales, and Federal Reserve stimulus.
Facebook rose 1 percent to $20.99. The stock plunged yesterday amid renewed investor concerns about how quickly the world’s largest social-networking service can boost sales from the growing number of users on mobile devices.
Caterpillar lost 1.8 percent to $89.27. The company said profit will be $12 to $18 a share, compared with a previous projection of $15 to $20. While a global recession remains possible, Caterpillar is forecasting moderate and “anemic” growth through 2015, Chairman and Chief Executive Officer Doug Oberhelman said yesterday in a presentation to analysts at the MINExpo industry conference in Las Vegas.
Lower Forecast
Red Hat retreated 3 percent to $55.80. The company cited a slowdown in the services side of its business for the lower forecast. Demand for subscriptions to its software remains strong, Chief Executive Officer Jim Whitehurst said on a conference call.
David Einhorn’s Greenlight Capital Inc. suffered in the past year by favoring gold-mining stocks over the precious metal, a strategy that Scotia Capital Inc. recommended last week. Two exchange-traded funds that Greenlight was buying in the third quarter of last year have declined since Sept. 30, 2011. Gold has risen about 9 percent during the same period in New York. Einhorn declined to comment on the performance.
Greenlight has stayed with one of the funds, the Market Vectors Gold Miners ETF, which invests in the metal’s biggest producers. The New York-based hedge fund is the third-largest shareholder even after cutting its stake by 17 percent in the second quarter, according to data compiled by Bloomberg.
Smaller Companies
The other ETF is also one of Van Eck Associates Corp.’s Market Vectors funds and tracks smaller mining companies, known as juniors. Greenlight finished last year’s third quarter with 1.9 million shares and sold all of them in the first half of this year, according to filings.
“There is a case to be made that the equities should start to outperform bullion,” Tanya Jakusconek, an analyst at Scotia Capital, wrote in a Sept. 20 report. Capital-spending cutbacks may lead to greater cash flow for many producers, the Toronto- based analyst wrote.
Five gold-mining stocks have the equivalent of buy ratings from Jakusconek, according to data compiled by Bloomberg. They are Agnico-Eagle Mines Ltd., Barrick Gold Corp., Eldorado Gold Corp., Goldcorp Inc. and Iamgold Corp.
To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Namitha Jagadeesh in London at njagadeesh@bloomberg.net.
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
