U.S. Stock Futures Fluctuate After McDonald’s Drops, Oil Slumps March 08, 2011, 8:45 AM EST
By Rita Nazareth
March 8 (Bloomberg) — U.S. stock futures swung between gains and losses as crude oil dropped, McDonald’s Corp. reported American sales that missed estimates and the European Central Bank’s Axel Weber indicated interest rates may rise.
McDonald’s slumped 0.8 percent after the world’s biggest restaurant chain said U.S. sales increased 2.7 percent, missing the average projection of 4 percent. Urban Outfitters Inc. plunged 13 percent after the clothing chain operator reported earnings that fell short of analyst projections. Nvidia Corp. added 1.9 percent after JPMorgan Chase & Co. raised its recommendation for the maker of graphics chips.
Standard & Poor’s 500 Index futures expiring in March rose less than 0.1 percent to 1,309.40 at 8:32 a.m. in New York. The benchmark gauge for U.S. equities declined 1.6 percent during the previous two days. Dow Jones Industrial Average futures fell 5 points, or less than 0.1 percent, to 12,073.
The S&P 500 slid 0.8 percent yesterday, erasing last week’s advance, as oil gained and chipmakers tumbled after Wells Fargo & Co. reduced its recommendation on the industry. The gauge rallied 4.2 percent this year through yesterday as companies reported earnings that topped analysts’ estimates and the Federal Reserve kept interest rates at a record low.
Oil declined for the first time in three days, retreating from a 29-month high as members of the Organization of Petroleum Exporting Countries discussed whether to hold a special meeting on a production increase. Crude slipped as Kuwait’s oil minister said OPEC members are considering whether to convene an “urgent meeting” to determine whether more output is needed. Futures trimmed earlier losses after Goldman Sachs Group Inc. and Bank of America Merrill Lynch raised their oil-price forecasts.
Market Expectations
Weber said the ECB has embarked on a normalization of interest rates and he doesn’t want to correct market expectations for as many as three quarter-point increases this year.
“I wouldn’t do anything here to try to correct market expectations at this point,” Weber told Bloomberg News in Frankfurt today when asked about investors pricing in an increase in the benchmark rate to 1.75 percent by the end of the year. It was the intention of the ECB to bring forward market expectations and “I see no reason at this stage to signal any dissent with how markets priced future policies,” he said.
McDonald’s slumped 0.8 percent to $75.70.
Urban Outfitters plunged 13 percent to $32.94. The clothing chain posted fourth-quarter earnings of 45 cents a share excluding some items, missing the average analyst estimate by 13 percent.
Nvidia gained 1.9 percent to $20.85 after being raised to “neutral” from “underweight” at JPMorgan by equity analyst Harlan Sur. The 12-month share-price estimate is $21.
–Editor: Nick Baker
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
From www.businessweek.com