BLBG: Stocks, S&P 500 Futures Drop on U.S. GDP; Treasuries Gain
European stocks and U.S. equity- index futures declined and Treasuries rebounded after a report showed America’s economy unexpectedly shrank in the fourth quarter.
The Stoxx Europe 600 Index slipped 0.4 percent at 8:35 a.m. in New York. Standard & Poor’s 500 Index futures lost 0.3 percent. The yield on 10-year Treasury notes dropped one basis point to 1.99 percent. The euro strengthened above $1.35 for the first time since 2011.
U.S. gross domestic product dropped at a 0.1 percent annual rate, the worst performance since the second quarter of 2009, when the world’s largest economy was still in the recession, Commerce Department data showed. The median forecast of 83 economists surveyed by Bloomberg called for a 1.1 percent gain in GDP.
The Federal Reserve is scheduled to issue a policy statement today.
The Stoxx 600 retreated as oil-services companies tumbled after Italy’s Saipem SpA (SPM) cut its profit forecast. Saipem lost 32 percent. Petrofac Ltd. sank 6.2 percent in London trading, Technip SA retreated 6.6 percent in Paris and Subsea 7 SA declined 5.8 percent in Oslo.
Imperial Tobacco Group Plc sank 4.8 percent as Europe’s second-biggest tobacco company said earnings will drop because of worsening conditions in Europe. Swedbank AB jumped 8.6 percent after raising its dividend payout ratio to 75 percent of profit as fourth-quarter net income more than quadrupled.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
