Stock futures signaled a lower open this morning after an economy-fuelled rally on Friday as European concerns come into focus.
Spanish Prime Minister Mariano Rajoy is facing calls to resign on allegations that he and his political party received illegal kickbacks. The country's bond yields rose this morning after news of the scandal broke. The 10-year Spanish bond yields 5.34%, 13 basis points higher than Friday. With corruption as a backdrop, Spaniards found out today that unemployment is continuing to rise. In January, another 132,000 workers in the country fell into joblessness.
Bond yields are also up in Italy as the country prepares for a general election that might result in PM Mario Monti's reforms getting rolled back. Silvio Berlusconi's party is now promising to abolish the income tax and refund tax revenue collected since Monti put the policy in place.
European economic indicators offered a bit of a silver lining to the political uncertainty. Producer prices fell 0.2% on a monthly basis in December 2012, meeting estimates. Prices were 2.1% higher than in December 2011. Investor confidence, measured by Sentix, hit an 19-month high of -3.9 in February, signaling that investors are less pessimistic.
After breaking through 14,000 for the first time in five years, Dow
(INDEXDJX:.DJI) futures are 0.37% lower at 13,879. S&P 500
(INDEXSP:.INX) futures are down 0.39% to 1,500.80 and Nasdaq
(INDEXNASDAQ:.IXIC) futures slipped 0.34% to 2,747.25. Asian and European equity indices all declined today and oil futures fell more than 1%.
Later this morning, December factory orders data will be released. Economists expect the index to jump 2.3% after going nowhere in November. Last week, the Institute for Supply Management said that manufacturing hit a nine-month high.
Yesterday, China said that its official non-manufacturing PMI rose a tenth of a point to 56.1 in January. (Readings over 50 signify expansion of the sector.)
(NASDAQ:DELL) could see heavy trading today as multiple reports say that private equity firms could take the computer company private early this week. The offering price is said to be between $13 and $15. Shares are up slightly at $13.65 in the premarket ahead of the buyout.
(NYSE:HLF) shares dropped 13.32% this morning on news that it is being investigated by the Federal Trade Commission. The multi-level marketing company is the target of a massive short sell by Bill Ackman of Pershing Square Capital Management, who says that the company is a pyramid scheme.
(See also: The One Question About Herbalife That Ackman Can't Answer
(NYSE:HUM) reported earnings of $1.19 per share, beating expectations by $0.12. Revenue rose 6% to $9.56 billion, missing expectations. The health-care company's net profit fell 3.6%. Its updated EPS forecast for the current quarter is $1.75 to $1.85, versus analyst estimates of $1.53.
No positions in stocks mentioned.
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