BLBG: U.S. Index Futures Signal Two-Day Drop From Record; Apple Gains
U.S. index futures retreated amid concern that better-than-expected earnings won’t be enough to trigger more gains.
Apple Inc. rose 1.3 percent in early New York trading after selling more iPhones than projected while unveiling plans to return more capital to shareholders. Merck & Co. added 1 percent after trial results showed its Januvia diabetes drug didn’t increase patients’ heart risk.
E-mini contracts on the Standard & Poor’s 500 Index expiring in June slipped 0.2 percent to 2,099.75 at 6:45 a.m. in New York. Dow Jones Industrial Average futures lost 37 points, or 0.2 percent, to 17,953.
“It’s difficult to see U.S. equities really rally a lot from these levels unless the dollar weakens and oil prices rebound,” said Peter Garnry, Saxo Bank A/S’s head of equity strategy. “These headwinds will hold the market back. Even though profit estimates had already come down, this hasn’t been enough for some companies. Apple is in a different league. The numbers were very good and the shares will get a strong boost from the capital-return program.”
Pfizer Inc., Ford Motor Co. and Kraft Foods Group Inc. are among 40 S&P 500 companies releasing results today. Of index members that have already reported this season, about three quarters beat profit projections and about half topped sales estimates.
U.S. stocks retreated from records yesterday, with biotechnology companies leading losses. The Nasdaq Composite Index topped its dot-com-era high last week and the S&P 500 closed at a record as Google Inc., Microsoft Corp. and Amazon.com Inc. rallied after posting financial results. U.S. shares have still lagged most developed-market indexes this year.
Among other stocks moving on corporate news, Whirlpool Corp. dropped 4 percent after cutting annual profit forecast because of currency effects and weaker demand in Brazil. Container Store Group Inc. slumped 26 percent after fourth-quarter profit and sales trailed analysts’ estimates.
Investors are also awaiting the outcome of the Federal Reserve’s two-day meeting, which begins today, for more clues on the timing of interest rate increases. None of the 78 economists in a Bloomberg survey expects the U.S. central bank to increase borrowing costs this week.
Most Fed policy makers expect to raise the benchmark interest rate by the end of 2015. With economic data missing estimates this month by the most in more than six years, some officials have said they are wary of lifting rates too soon.
A Conference Board release at 10 a.m. in New York will probably show consumer confidence rose in April, economists projected. Data tomorrow may show U.S. economic growth slowed to a 1 percent pace in the first quarter, from 2.2 percent in the previous three months. Another report may show property prices rose in February.
