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US STOCKS-Wall St set to dip at open after weak Japanese data

Source : REUTERS
Last Updated: Mon, Aug 13, 2012 13:30 hrs

* Futures off: Dow 12 pts, S&P 1.3 pts, Nasdaq 1 pt

* Japan's gross domestic product weaker-than-expected

* Julius Baer to buy BofA's non-U.S. Merrill Lynch wealth manager

By Chuck Mikolajczak

NEW YORK, Aug 13 (Reuters) - U.S. stock index futures pointed to a slightly lower open on Monday after six straight sessions of gains by the S&P 500 as Japan showed signs of economic weakness.

Japan's economy expanded just 0.3 percent in April-June, half the pace expected, data showed, raising doubts about the strength of the recovery. Meanwhile, Europe's debt crisis weighed on worldwide demand.

Investors' hopes for central bank easing amid signs of global weakness have contributed to stock market gains.

"Japan was a little weaker than expected. It might raise hopes that there might be some central bank coordination, but I'm not seeing that in any of the markets today," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

"We are a bit extended. We just need a little bit of settling back down after a fairly substantial run-up."

Late on Friday, the president of the San Francisco Federal Reserve said the Fed should launch a fresh round of bond buying to lower the U.S. unemployment rate more quickly, fuelling speculation that the central bank could soon unveil a new round of quantitative easing.

The benchmark S&P index has risen 2.99 percent over the past six sessions, its longest rally since December 2010, but the index has risen only 0.3 percent in the past three sessions as the S&P hovers near levels not seen since early May.

"The market has had a small, positive consolidation just above the key 1,400 level, with no clear theme in either direction. The market is biding time," said Andre Bakhos, director of market analytics at Lek Securities in New York.

"With no economic data scheduled today, investors will look to the rest of a busy week for more direction."

S&P 500 futures were off 1.3 points and were slightly 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 were down 12 points and Nasdaq 100 futures lost 1 point.

Swiss private bank Julius Baer is to buy Bank of America's Merrill Lynch wealth manager outside the United States, paying 860 million Swiss francs ($882 million) for the loss-making business to boost its assets managed by 40 percent and backing the deal with plans to raise 1.19 billion Swiss francs ($1.22 billion) in new capital. Bank of America shares gained 0.3 percent to $7.76 in premarket trading.

Motorola Mobility has told employees it plans to slash 20 percent of its workforce and shut down nearly a third of its offices worldwide, the New York Times reported. Shares of parent company Google Inc advanced 1.1 percent to $648.71 in trading before the open.

Comverse Technology Inc said it had agreed to be acquired by Verint Systems Inc following the planned spin-off of its Comverse Inc telecom business. Comverse shares gained 3.5 percent to $5.90 in premarket trading.

Sysco Corp shares edged up 0.1 percent at $28.88 before market's open after the food distributor reported fourth-quarter earnings.

According to Thomson Reuters data through Friday, of the 449 companies in the S&P 500 that have reported second-quarter earnings to date 68 percent have reported earnings above analyst expectations, matching the beat rate for the last four quarters.



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