U.S. stock-index futures were little changed after Tyson Foods Inc. offered to buy Hillshire Brands (HSH) Co. and investors speculated that the economy will recover from the first contraction in three years. Hillshire Brands jumped 15 percent after Tyson bid $50 a share in cash for the meat producer. Abercrombie & Fitch Co. jumped 7.2 percent as the clothing retailer posted a first-quarter loss that was narrower than analysts estimated. Palo Alto Networks Inc. climbed 13 percent after the computer-security company’s earnings beat forecasts. Twitter Inc. rallied 2.4 percent on an analyst upgrade. Futures on the Standard & Poor’s 500 Index expiring next month rose 0.1 percent to 1,911.80 at 8:54 a.m. in New York. Dow Jones Industrial Average futures gained 25 points, or 0.2 percent, to 16,653. “No matter what that GDP number was, the underlying backdrop is that the data is improving,� Sam Turner, a fund manager with Richmond, Virginia-based Riverfront Investment Group LLC, said in a phone interview. His firm oversees $4.6 billion. “We had two months there where small caps, higher momentum names really took it on the chin. Now they’re oversold and start to see some recovery.� The U.S. economy contracted for the first time in three years from January through March as companies added to inventories at a slower pace and curtailed investment. Gross domestic product fell at a 1 percent annualized rate in the first quarter, a bigger decline than projected, after a previously reported 0.1 percent gain, the Commerce Department said. Better Economy A pickup in receipts at retailers, stronger manufacturing and faster job growth indicate the first-quarter setback will prove temporary as pent-up demand is unleashed. Federal Reserve policy makers said at their April meeting that the economy has strengthened after adverse weather took its toll. Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market continues to strengthen. Jobless claims fell by 27,000 to 300,000 in the week ended May 24, a Labor Department report showed. The median forecast of 50 economists surveyed by Bloomberg called for 318,000. Separate data will probably show that pending home sales rose 1 percent in April, economists estimated before the report due at 10 a.m. They rose 3.4 percent the prior month. Hillshire added 15 percent to $51.40. Tyson, the second-largest U.S. pork producer, made an unsolicited $6.8 billion offer to buy Hillshire, trumping a competing bid from Pilgrim’s Pride Corp. Abercrombie Loss Abercrombie & Fitch jumped 7.2 percent to $37.65. The clothing retailer posted a first-quarter loss that was narrower than analysts estimated as new styles of shorts and crop tops slowed its sales decline. Chief Executive Officer Mike Jeffries has been working to revive Abercrombie’s appeal among teenage shoppers who’ve strayed from the chain in favor of fast-fashion purveyors such as Forever 21 and Hennes & Mauritz AB. Palo Alto Networks climbed 13 percent to $78.60. The company posted third-quarter adjusted earnings per share of 11 cents, compared with the 10 cents analysts had estimated. It reported revenue of $150.7 million, topping the $146.2-million analyst forecast. Twitter rallied 2.4 percent to $34.59 as Cantor Fitzgerald raised the stock to a buy from hold. The operator of the social-networking site surged 11 percent yesterday, reversing a two-week slide amid a rout in technology stocks. Tilly’s Inc. (TLYS) slumped 28 percent to $7.64 after giving a profit forecast that missed estimates. The retailer forecast second-quarter profit of 3 cents to 7 cents a share, trailing the 13 cents analysts had projected. To contact the reporter on this story: Lu Wang in New York at lwang8@bloomberg.net To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net Jeff Sutherland

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