BS: U.S. Stock Futures Fall While Oil, Gold Lead Commodities Higher
U.S. equity-index futures fell, signaling the Standard & Poor’s 500 Index may retreat from a record, and the yen strengthened amid concern American lawmakers will fail to reach a budget deal. Oil and gold led commodities higher and Italian bonds gained for a third day.
Standard & Poor’s 500 Index futures slid 0.3 percent, erasing earlier gains, and the Stoxx Europe 600 Index lost 0.6 percent at 9:03 a.m. in New York. West Texas Intermediate crude jumped 1.2 percent to $98.54 a barrel and gold added 2.1 percent. Japan’s currency gained 0.4 percent to 102.82 per dollar. The yield on Italy’s 10-year bond fell five basis points to 4.08 percent and the rate on similar-maturity 10-year Treasuries dropped three basis points to 2.80 percent.
Barclays Plc told investors to reduce holdings of U.S. stocks in 2014 as less attractive valuations may end their leadership in equities. Rep. Steny Hoyer, the No. 2 House Democrat, told CNBC he doesn’t like what he’s heard about the budget deal as negotiators try to hammer out a plan to trim automatic spending cuts that might break a three-year cycle of failed fiscal talks.
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“Hoyer, that news certainly could add to that drop,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a telephone interview. “That was the situation last week, the budget wasn’t coming to the fruition and it could certainly be a drop from that. Without a doubt, that sounds feasible.”
U.S. oil inventories probably fell for a second week, analysts said in Bloomberg News survey before a report tomorrow. Italy’s factory output rose 0.5 percent after gaining 0.2 percent in September and industrial production in the U.K. increased for a second month, data showed today.
Gold, Oil
Gold jumped to $1,259.50 an ounce and silver advanced 1.9 percent to $20.2319 an ounce.
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Brent crude pared gains, advancing 0.1 percent to $109.53 a barrel as the head of Libya’s Petroleum Facilities Guard Brigadier, Idris Bukhamada, said ports will open.
The Italian-German spread narrowed to as low as 224 basis points, the least since July 2011. The yield on Spain’s 10-year bonds fell five basis points to 4.06 percent, narrowing the spread with similar-maturity German bunds to 222 basis points, the least since June 2011.
Gilts Gain
U.K. 10-year gilt yields slipped three basis points to 2.89 percent, while the rate on similar-maturity German bunds was one basis point lower at 1.83 percent.
CGG SA, the largest seismic surveyor of oilfields, rose 4.6 percent after Raymond James Financial Inc. upgraded the shares. Royal Vopak NV dropped 2.9 percent after saying it may miss its 2016 profit forecast.
The S&P 500 index (SPX) reached an all-time high of 1,808.37 yesterday. The gauge has rallied 27 percent and is on pace for its biggest annual jump since 1997.
General Motors Co. may move. The Treasury Department sold its shares, freeing the carmaker from U.S. taxpayer ownership almost half a decade after first receiving government aid.
Texas Instruments Inc. may be active after the largest analog chipmaker forecast fourth-quarter sales and profit in line with analysts’ predictions as demand for car components makes up for weaker orders for other industrial equipment.
McDonald’s Offering
McDonald’s Corp. (MCD:US) is marketing bonds in euros as U.S. companies raise debt in the currency at the fastest pace since 2008. American companies issued 46 billion euros of bonds in Europe this year compared with 20 billion euros in 2012, according to data compiled by Bloomberg.
The Philippine Stock Exchange Index dropped 2 percent, the most in more than two months after a record increase in electricity prices boosted concern inflation will accelerate. India’s S&P BSE Sensex lost 0.3 percent, snapping a three-day gain.
The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong lost 0.4 percent and the Shanghai Composite Index slid 0.1 percent. Data showed factory production rose 10 percent from a year earlier, compared with analysts’ median projection of 10.1 percent in a Bloomberg News survey.
To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net; Callie Bost in New York at cbost2@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
