BLBG: U.S. Stocks Futures Drop After Retail, Jobless Reports
U.S. stock-index futures retreated, signaling the Standard & Poor’s 500 Index will drop a third day, after data showed a rise in jobless claims and a smaller-than-estimated gain in retail sales.
Hewlett-Packard Co. added 1.4 percent after Goldman Sachs Group Inc. raised its rating on the personal-computer maker. Tibco Software Inc. advanced 5.2 percent after shareholder Praesidium Investment Management said it will actively engage with the company’s board.
Futures on the S&P 500 (SPX) expiring in June fell 0.2 percent to 1,940.50 at 9:08 a.m. in New York, erasing an earlier advance following the data. Dow Jones Industrial Average contracts slid 27 points, or 0.2 percent, to 16,828.
“People are looking for a reason to sell stock right now,” Dan McMahon, director of institutional equity trading at Raymond James and Associates, said in a phone interview. “You can’t make new highs everyday, and with uncertainty coming out of D.C. yesterday, there would have to be a really compelling reason to buy right now.”
The S&P 500 lost 0.4 percent yesterday, the most in three weeks, as the World Bank cut its forecast for global growth and Boeing Co. (BA) sank after U.S. House Majority Leader Eric Cantor’s defeat in a primary election threatened congressional reauthorization of low-cost lending that benefits the company. The gauge had closed at a record for four straight sessions through June 10.
Data Watch
Retail sales rose 0.3 percent in May as American consumers took a respite following a three-month surge in shopping. The gain followed a revised 0.5 percent gain in April that was much larger than previously estimated, Commerce Department figures showed. The median forecast of 83 economists surveyed by Bloomberg called for a 0.6 percent advance.
A separate report indicated applications for unemployment benefits in the U.S. rose to 317,000 last week. The median forecast of 52 economists surveyed by Bloomberg called for 310,000. Claims have averaged around 324,000 so far in 2014.
“There is some indication that the economy continues to move forward in a fairly measured fashion,” Rob Lutts, chief investment officer at Salem, Massachusetts-based Cabot Money Management Inc., said in a phone interview. He oversees $600 million of assets. “I think this perpetuates the worry that investors have today. What they want is that clear blue sky economic condition, and we don’t have that.”
Fed Stimulus
The S&P 500 has advanced 7.1 percent since a low on April 11 as data showed the U.S. economy is recovering from the impact of extreme weather earlier this year. The Federal Reserve is watching the labor market as it moves to complete a monthly stimulus program late this year. Three rounds of bond buying have helped propel the S&P 500 higher by as much as 188 percent from its bear-market low in March 2009.
Investors are also watching Iraq where Islamic militants extended gains after capturing the country’s second-biggest city, while the U.S. weighed an Iraqi request for air support. After seizing Mosul in the north, fighters for a group calling itself the Islamic State in Iraq and the Levant, or ISIL, took dozens of hostages at the Turkish consulate, as hundreds of thousands of residents fled.
“We’re following the situation in Iraq closely,” Marinelli said. “Overall it’s not positive, but it’s a very fluid situation and can change very quickly.”
Hewlett-Packard climbed 1.4 percent to $33.71. Goldman Sachs raised its rating on the personal-computer maker to neutral from sell.
Tibco Advances
Tibco rose 5.2 percent to $21.80. Praesidium Investment, which said it owns about 5.5 million shares of the software maker, sent a letter on May 20 to the Palo Alto, California-based company’s board. Tibco is falling short of its potential, resulting in a discrepancy between the value of its technology and share price, Praesidium said in a statement yesterday.
Restoration Hardware Holdings Inc. rallied 16 percent to $82.94. The home-furnishings chain boosted its forecast for full-year profit to at least $2.24 a share, after predicting in March no more than $2.22. Analysts estimate earnings will be $2.21. The Corte Madera, California-based company also raised its outlook for revenue.
Lululemon Athletica Inc. (LULU) declined 15 percent to $37.82. The athletics-apparel retailer forecast full-year earnings of as much as $1.76 a share, down from an earlier prediction of as much as $1.90. The forecast also fell short of analyst estimates calling for $1.89.
To contact the reporter on this story: Inyoung Hwang in London at ihwang7@bloomberg.net
To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net Jeremy Herron, Will Hadfield
