BLBG: U.S. Stock-Index Futures Rise; S&P 500 May Extend Record
U.S. stock futures rose, signaling the Standard & Poor’s 500 Index will extend a record, as investors awaited reports on durable-goods orders and consumer confidence to gauge the strength of the world’s largest economy.
Pfizer Inc. added 0.8 percent in early New York trading after abandoning its attempt to buy AstraZeneca Plc. Hillshire Brands Co. jumped 22 percent after Pilgrim’s Pride Corp. offered to buy the meat producer for $6.4 billion. Michael Kors Holdings Ltd. (KORS), the luxury-goods company reporting annual results tomorrow, advanced 1.2 percent. Staples Inc. (SPLS) slid 1.8 percent as Goldman Sachs Group Inc. recommended selling its shares.
Futures on the S&P 500 (SPX) expiring in June rose 0.4 percent to 1,904.9 at 7:27 a.m. in New York. Dow Jones Industrial Average contracts gained 66 points, or 0.4 percent, to 16,652. Futures on the Nasdaq-100 Index increased 0.5 percent. U.S. equity markets were closed yesterday for the Memorial Day holiday.
“The growth that was delayed by the harsh winter will come through,” Tom Walker, who manages the 196 million-pound ($330 million) Martin Currie Global Portfolio Trust, said by phone from Edinburgh. “But it’s just getting harder as the market goes higher, valuations are getting stretched and volumes aren’t as high. Maybe we need to pause for breath. I’m not bearish -- there is still a lot of money supporting asset levels -- though it’s definitely about stock picking now.”
The S&P 500 is trading at 16.1 times the average projected earnings of its members, up from a multiple of 14.8 on Feb. 3, according to data compiled by Bloomberg. A gauge of U.S. equity volatility known as the VIX dropped 8.7 percent last week to 11.36, its lowest level since March 2013. The Chicago Board Options Exchange Volatility Index has retreated 47 percent from a 13-month high in February.
Durable Goods
A Commerce Department report at 8:30 a.m. in Washington will show orders for durable goods slipped in April after two consecutive months of gains, economists surveyed by Bloomberg predicted. A separate release at 10 a.m. in New York may show the Conference Board’s index of consumer confidence rose this month to near a six-year high.
The preliminary reading of Markit Economics’ index of U.S. service industries may show activity expanded at a slower pace in May, according to the median economist estimate compiled by Bloomberg before data at 9:45 a.m. A gauge of property prices in 20 cities probably increased 11.8 percent in the 12 months through March, economists projected before the latest reading of the S&P/Case-Shiller index at 9 a.m.
Pfizer Climbs
Pfizer rose 0.8 percent to $29.73. The largest U.S. drugmaker yesterday stopped its attempt to buy AstraZeneca for 69.4 billion pounds, saying the bid rejected by its London-based competitor represented full value. Under U.K. takeover rules, Pfizer had until 5 p.m. London time yesterday to make a firm offer. It must now wait at least three months before talks can restart with AstraZeneca.
Hillshire, which sells Jimmy Dean sausages and Ball Park frankfurters, rallied 22 percent to $45. Pilgrim’s Pride offered $45 a share in cash for the company, according to a statement today. The combined entity would have sales of $12.4 billion.
Michael Kors, which has rallied 19 percent so far this year, increased 1.2 percent to $97.60. The Hong Kong-based company said on Feb. 4 that profit for the 12 months through March would reach as much as $3.09 a share. Analysts forecast $3.12, according to data compiled by Bloomberg.
Cisco Systems Inc. (CSCO) rose 1.5 percent to $24.90 as Deutsche Bank AG upgraded its rating on the maker of networking equipment to buy from hold. The brokerage cited higher demand for the company’s new switching, routing, security, wireless and cloud-computing products.
Staples, a maker of office stationary and furniture, slipped 1.8 percent to $11.44. Goldman Sachs cut its rating on the stock to sell from neutral, saying the company’s investments will offset the benefits of closing stores and cutting costs.
To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net
