US stock futures fell, indicating the Standard & Poor’s 500 Index may retreat from the highest level in more than eight months, after Yahoo! Inc.’s sales forecast missed analysts’ estimates and commodities dropped.
Yahoo, owner of the second most popular US search engine, slid 3.8% in German trading. Alcoa Inc., the largest US aluminum producer, and ConocoPhillips declined on lower metal and crude oil prices. Apple Inc. gained 3.6% in pre- market trading in New York after price cuts attracted more first-time buyers for Macintosh personal computers, helping third-quarter profit top analysts’ forcasts.
Futures on the S&P 500 expiring in September fell 0.3% to 950.20 in early trading in London. Dow Jones Industrial Average futures dropped 0.4% to 8,854. Nasdaq-100 Index futures decreased 0.1% to 1,553.25.
The S&P 500 has rallied 8.6% since July 10 as companies from Goldman Sachs Group Inc. to Intel Corp. reported earnings that beat analysts’ estimates. Wells Fargo & Co., Morgan Stanley and Pepsi Co. are among companies scheduled to publish results today.
“After the recent gain a consolidation is more than overdue,” said Claudio Meiger, who manages about 100 million at Basel, Switzerland-based CIC Schweiz AG. “Today’s earnings reports from banks will be interesting. Wells Fargo and Morgan Stanley’s results will not be as good as the results we saw last week and that could be the trigger for a few days of declines.”
US stocks rose yesterday, extending the Dow Jones Industrial Average’s longest rally in two years, as Caterpillar Inc.’s earnings tripled analyst estimates and Federal Reserve Chairman Ben S. Bernanke said there are signs the economy is stabilizing.
Morgan Stanley advised investors to “sell into” the global rally in equities, saying “cyclical growth risks have diminished but not disappeared.”
“The key drivers behind improving sentiment, upside to near-term growth estimates and continued positive earnings momentum, may prove more transitory than the market believes,” New York-based Morgan Stanley strategist Jason Todd wrote in a report dated July 21.
Per-share earnings beat analysts’ projections by an average of 13% for the 85 companies in the S&P 500 that reported quarterly results since July 8, according to data compiled by Bloomberg. Analysts forecast profits fell an average 33% in the second quarter and will decrease 20% from July through September, according to Bloomberg data.
Yahoo fell 3.8% to 16.11 in Germany. The company forecast third-quarter sales that missed some analysts’ estimates as an online advertising slump cut into revenue. Revenue will be 1.45bn to 1.55bn in the current quarter, Yahoo said. Jeffrey Lindsay, an analyst with Sanford C. Bernstein & Co. in New York, had projected 1.56bn.
Advanced Micro Devices Inc. dropped 11% to 3.64. The second-largest maker of personal-computer processors reported a second-quarter loss of 330 million after sales declined.
Alcoa declined 1.1% to 10.03. Base metals including copper fell in Asia, snapping a three-day rally, on speculation demand will slacken in a seasonal slowdown in China, the world’s largest user of the metal.
Freeport-McMoRan Copper & Gold Inc. slipped 0.9% to 57.65. The operator of the world’s biggest gold mine was cut to “hold” from “buy” at Citigroup Inc., which said “the recent rally in Freeport shares has left insufficient upside.”
ConocoPhillips, the second-biggest US refiner, retreated 0.6% to 43.24. Schlumberger Ltd., the world’s third- largest oilfield-services provider, declined 1.4% to 56.20. Crude oil for September delivery in New York fell for the first time in six days after an industry report showed crude supplies rose in the US, the largest energy user.
Apple climbed 3.6% to 156.98 in New York after saying profit rose to 1.23bn, or 1.35 a share. Sales gained 12% to 8.34bn in the quarter ended June 27. Analysts on average predicted profit of 1.17 and sales of 8.21bn, according to a Bloomberg survey.
Starbucks Corp. advanced 8.9% to 16. The world’s largest cafe owner forecast profit excluding some items of at least 74 cents to 75 cents a share in fiscal 2009, topping the average analyst estimate of 71 cents in a Bloomberg survey.
Zions Bancorporation slid 2.2% to 10.45 after the Utah lender was cut to “sell” from “hold” at Citigroup Inc., which cited “the probability of additional capital raises.”
