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US STOCKS-Index futures fall as Europe and TI weigh

Source : REUTERS
Last Updated: Tue, Jul 24, 2012 11:50 hrs

* Texas instruments warns on Q3

* Moody's cuts Germany's ratings outlook

* Germany's private sector shrinks

* Futures down: Dow 28 pts, S&P 3.2 pts, Nasdaq 11

By Edward Krudy

NEW YORK, July 24 (Reuters) - U.S. stock index futures fell on Tuesday as traders remained focused on high bond yields in Spain and as a cautious outlook from tech bellwether Texas Instruments weighed on sentiment.

* Texas Instruments Inc second-quarter profit beat Wall Street expectations but the company warned that its third-quarter revenue would be weaker than usual for this time of year as customers are cautious due to global economic uncertainties.

* Concerns about the euro zone focused on Spain's high borrowing costs due to fears the country may seek a bailout, a survey showing Germany's private sector shrank for a third straight month, and Moody's move to cut Germany's rating outlook to negative.

* "The market is experiencing a renewed set of fears with concerns over a global economic slowdown and continued worries stemming from the euro zone," said Andre Bakhos, director of market analytics at Lek Securities in New York. "Investors are stepping back and taking a risk-off stance for the moment."

"Throw in earnings season as another variable and we are back to an erratic environment," he said.

* S&P 500 futures fell 3.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 28 points and Nasdaq 100 futures sank 11 points.

* Spanish five-year government bond yields rose above 10-year yields for the first time since June 2001 on Tuesday, as investors fretted about the possibility that Madrid may need a full-blown sovereign bailout. The 10-year last traded at around 7.5 percent.

* European stocks were slightly down in morning trade, adding to the market's two-session slide, as a weaker-than-expected German purchasing managers' survey showed private sector activity in Europe's largest country contracting for a third straight month.

* An even gloomier picture for the overall euro zone's private sector, which shrank for a sixth month in July as manufacturing output nosedived, added to the likelihood that the bloc will slump back into recession.

* Investors expected a flurry of earnings on Tuesday, from companies such as Apple, Broadcom, DuPont , Lockheed Martin, AT&T, and UPS.

* On the macro front, investors awaited U.S. flash Markit Manufacturing PMI data for July. Economists in a Reuters survey expect a reading of 52.0 in the main index versus 52.5 in the final June report.

* Software maker VMware Inc said it will acquire privately held Nicira Inc for $1.05 billion in cash to expand its portfolio and establish a leading position in virtualized networks.

* Pfizer Inc said on Monday that its experimental Alzheimer's disease treatment failed to prove effective in one of four high-stakes late-stage trials in patients with mild to moderate forms of the memory-robbing disease.

* U.S. chipmaker Volterra Semiconductor Corp posted lower-than-expected quarterly results as research and development costs rose, sending its shares down 6 percent in trading after the bell.



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