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Pre-Market: BNP Paribas to Pay Nearly $9 Billion, American Apparel Adopts Poison Pill

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The French bank will pay a record amount for dealing with blacklisted countries.

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US stock indices are set to slightly pare gains on the last day of the second quarter. Investors will closely watch economic indicators on housing and manufacturing and the US government's treatment of BNP Paribas SA's (EPA:BNP) flouting of international sanctions.

After ending Friday higher, futures pointed to slight losses on Monday. Futures on the Dow Jones Industrial Average (INDEXDJX:.DJI) fell 0.20% to 16,724. S&P 500 (INDEXSP:.INX) futures sank 0.16% to 1,948.80, capping off a quarter where the index rose over 5.5%. Nasdaq (INDEXNASDAQ:.IXIC) futures ticked down 0.02% to 3,830.75.

Later this morning, the Institute for Supply Management will release its monthly PMI report on business conditions in the Chicago area. Economists expect the indicator to come in at 64 for June, a 1.5% drop from last month. Investors will also get an update on the housing market. The National Association of Realtors' Pending home sales index is expected to show a 1% rise in May after gaining 0.4% in April.

In company news, BNP Paribas, France's largest bank, faces a settlement of $8.9 billion for skirting economic sanctions, according to reports. The company is under fire for doing business with Iran, Sudan, and banned countries. Such a fine would be by far the largest that the US has exacted from a foreign financial firm. Authorities are also reportedly considering barring BNP Paribas from clearing dollar trades for a year, starting in 2015. The firm is likely to cut its dividend and sell off bonds to pay the fine. The US Justice department will announce it decision later today.

Shares of Facebook (NASDAQ:FB) could suffer today after it was revealed that it conducted a psychological test on hundreds of thousands of users in January 2012. The test tracked users' reactions to positive and negative material in the News Feed section of the site. While the study appears to have been legal, it might see some backlash from users. Facebook shares are down just 0.31 in pre-market trading today.

Over the weekend, American Apparel Inc. (NYSEMKT:APP) said that it will adopt a one-year "poison pill" to ensure that Dov Charney, its founder, president, CEO, and largest stakeholder, cannot regain control of the company. The retailer recently suspended Charney amidst multiple allegations of sexual harassment and misallocation of corporate funds. Charney denies such wrongdoing, and registered his interest in reacquiring the company in an SEC filing. The filing also reveals that Charney owns 27.2% of the company. After surging nearly 30% on Friday, American Apparel shares are down 13% in pre-market trading.

General Motors (NYSE:GM) is preparing to pay damages to victims of crashes caused by faulty ignition switches. The automaker hired a compensation expert to distribute money to the families. The total payout is expected to reach the billions.

In international news, Argentina may miss payments to international creditors today, but it has a 30-day grace period before going into default.


Twitter: @vincent_trivett
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No positions in stocks mentioned.
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