BLBG: U.S. Stock Futures Little Changed Amid Earnings, Economy
U.S. stock-index futures were little changed, after benchmark indexes extended records yesterday, as consumer prices rose in June and investors watched earnings from Coca-Cola Co. and Goldman Sachs Group Inc.
Coca-Cola fell 2.1 percent as volumes missed estimates. Cintas Corp. (CTAS) dropped 4 percent after the uniform maker forecast earnings for the current fiscal year that were below analyst estimates. Goldman Sachs advanced 0.8 percent after profit beat analysts’ projections. Johnson & Johnson added 1.1 percent as profit more than doubled and the company boosted its earnings forecast.
Standard & Poor’s 500 Index futures expiring in September fell 0.1 percent to 1,676.70 at 8:40 a.m. in New York. Contracts on the Dow Jones Industrial Average lost 2 points, or less than 0.1 percent, to 15,414 today.
“Guidance has driven earnings expectations down quite considerably lately so any earnings surprise this quarter will be to the upside,” said Patrick Spencer, head of U.S. equity sales for Robert W. Baird & Co. in London. “Corporations will continue to borrow money cheaply and use that for high dividend payments and stock buybacks, which will give a great foundation to the market.”
The S&P 500 (SPX) extended its all-time high yesterday after better-than-estimated earnings from Citigroup Inc. overshadowed a disappointing retail sales report. The gauge has risen for eight straight days, the longest winning streak since January.
Bernanke Testimony
Federal Reserve Chairman Ben S. Bernanke bolstered the rally last week after he backed sustained monetary stimulus. Bernanke will deliver his semi-annual monetary policy report to Congress this week, starting tomorrow at the House Financial Services Committee.
The cost of living in the U.S. rose in June as gasoline prices increased the most in four months. The consumer-price index increased 0.5 percent after a 0.1 percent gain the prior month, Labor Department figures showed today in Washington. The median forecast in a Bloomberg survey called for a 0.3 percent rise.
A separate report today will show that output at factories, mines and utilities advanced 0.3 percent in June after stagnating in May, according to the median estimate of economists surveyed by Bloomberg. The Fed will release the industrial production data at 9:15 a.m. New York time.
Profit at companies listed on the S&P 500 rose 2 percent last quarter, down from a projection of 8.7 percent in December, according to analyst estimates compiled by Bloomberg. Yahoo! Inc. will report earnings after equity markets close today.
Cola Volumes
Coca-Cola declined 2.1 percent to $40.15. Second-quarter revenue and volumes missed forecasts, with the company citing “ongoing challenging macroeconomic environment and unusually poor weather.”
Ford Motor Co. fell 1.2 percent to $16.91 after Goldman removed the carmaker from its conviction buy list. The firm maintained a buy rating on the stock. General Motors Co. rose 1.2 percent to $36.93 after Goldman added it to the conviction list.
The firm cut the U.S. automaker sector to neutral for the first time since 2009 even after data yesterday showed sales at car and parts dealers gained the most in seven months in June.
Cintas dropped 4 percent to $45.96. The company forecast earnings for the 2014 fiscal period of $2.66 to $2.75 a share. That’s less than the $2.79 per share projected by analysts. The stock did not trade in Europe today.
Dialysis Payments
DaVita HealthCare Partners Inc. (DVA) lost 1 percent to $119 as Goldman Sachs cut its rating on the provider of kidney-dialysis to sell from neutral. The stock has slipped only 0.7 percent since the U.S. Medicare system proposed cutting payments by 9.4 percent next year, showing investors may be too optimistic regarding a better final dialysis rate, Goldman said.
Goldman Sachs increased 0.8 percent to $164.25 as the bank reported earnings that topped analysts’ estimates on a jump in fixed-income trading and investment-banking revenue.
Second-quarter net income more than doubled to $1.93 billion, or $3.70 a share, from $962 million, or $1.78, a year earlier, the New York-based company said. That beat the $2.89 average estimate of 27 analysts in a Bloomberg survey.
Johnson & Johnson rose 1.1 percent to $91.41. The world’s biggest maker of health-care products said 2013 adjusted profit will be as much as $5.47 a share. Its previous forecast topped out at $5.45 a share. Profit more than doubled after the J&J sold its stake in Irish biotechnology company Elan Corp.
To contact the reporters on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net; Alex Barinka in New York at abarinka2@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
