BLBG: U.S. Stock-Index Futures Drop as Alcoa Sparks Earnings Concern
U.S. stock-index futures declined, signaling equities will fall, as Alcoa Inc. unofficially kicked off the earnings season with quarterly sales that missed projections.
E-mini contracts on the Standard & Poor’s 500 Index expiring in June slid 0.2 percent to 2,072.5 at 6:53 a.m. in New York, paring a drop of as much as 0.4 percent. Dow Jones Industrial Average futures lost 23 points, or 0.1 percent, to 17,806.
The S&P 500 rose Wednesday as minutes from the Federal Reserve’s latest meeting, held before last week’s worse-than-forecast jobs data, showed that officials were split on whether they would raise interest rates in June. The benchmark gauge has still fallen 1.7 percent from a March 2 record amid concern a stronger dollar and tumbling oil prices will hurt profits, while European stocks rallied on central-bank stimulus.
“Reporting season kicked off yesterday, and it will be very interesting to listen to the comments regarding the strong USD, if major companies see any danger for their exports,” said Guillermo Hernandez Sampere, who helps manage about 150 million euros ($161 million) at MPPM EK in Eppstein, Germany. “As more as signs of weaker U.S. economy are accompanied by a stronger USD, U.S. markets will not rise as European markets do.”
JPMorgan Chase & Co. and Intel Corp. are among 35 S&P 500 companies reporting results next week. Analysts have slashed corporate profit projections, predicting a slump through September. Earnings fell 5.8 percent in the first quarter, they estimated, having seen an increase as recently as January.
Still, projections have a history of pessimism. Going back five years in data compiled by Bloomberg, analyst predictions for S&P 500 companies were on average 5.1 percent lower than the final quarterly results.
Alcoa Forecast
Alcoa fell 2.3 percent in early New York trading after the biggest U.S. aluminum producer also forecast a global supply glut for the metal in 2015.
Zynga Inc. slumped 7.9 percent after saying founder and Chairman Mark Pincus will replace Don Mattrick as chief executive officer.
Perrigo Co. gained 3.5 percent after saying its board will meet to discuss a bid by Mylan NV. The drugmaker’s shares jumped 18 percent yesterday after Mylan said it offered $205 per share for the company. Infinera Corp. rose 2 percent after offering to buy Swedish networking-solutions provider Transmode AB for about $350 million.
