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Pre-Market: Apple Settles E-Book Price-Fixing Lawsuit; IMF Cuts Its US Outlook


The Federal Reserve's FOMC meeting kicks off later today.

Stock futures pointed toward a slightly higher open on Thursday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.11% to 16,721. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.17% to 3,778.75.  Futures on the S&P 500 (INDEXSP:.INX) were up 0.12% to 1,931.60.


Apple (NASDAQ:AAPL) reached an out-of-court settlement in a class-action lawsuit that claimed the iPad-maker was fixing e-book prices. While the terms of the settlement have not been revealed, Apple faced $840 million in claims. A US district judge determined Apple colluded with publishers including HarperCollins Publishers, Penguin Group, and Simon & Schuster to fix prices in a scheme to fight Amazon's (NASDAQ:AMZN) stronghold on the e-book market. Apple is appealing the decision, the results of which may affect the terms of the settlement. Shares of Apple rose 0.37% in pre-market trading.

BP (NYSE:BP) has won a $43 million natural gas deal with the Pentagon, its first with the US government since sanctions were imposed following the Deepwater Horizon oil spill in 2010. BP was once among the Pentagon's top-three oil suppliers, regularly winning north of $1 billion in contracts from the US government annually. Meanwhile, BP is close to signing a $20 billion 20-year deal with the China National Offshore Oil Corporation (NYSE:CEO) to supply liquid gas to China's third-largest national oil company. Shares of BP fell 0.72% ahead of the opening bell.

General Motors (NYSE:GM) is recalling 3.36 million more cars for ignition switch issues, bringing the total number of recalls the company has issued worldwide this year to 44, totaling roughly 20 million vehicles. The total number of vehicles recalled specifically for ignition switch-related issues has now doubled to 6.5 million. Recall-related charges have cost GM $2 billion this year so far. However, despite the recalls, General Motors' US sales were at their highest level in May since August 2008. Shares of GM rose 0.50% in pre-market trading.

PayPal, a subsidiary of eBay (NASDAQ:EBAY), is expanding its services into 10 new countries including Nigeria and nine other countries in sub-Saharan Africa, Eastern Europe, and Latin America. PayPal has optimized its services to be easily used through mobile phones. PayPal is only offering services that allow consumers to pay PayPal-enabled merchants and is not yet approving local merchants nor offering peer-to-peer transactions in these markets. Shares of eBay rose 0.04% ahead of the open.


The International Monetary Fund reduced its 2014 US growth forecast from 2.8% to 2%, and suggested the Fed keep its policy rate near zero longer than most predict it will. The IMF maintained its 3% growth outlook for 2015. ICSC-Goldman retail store sales remained steady in the week of June 14, with a 3.1% year-on-year increase. The consumer price index increased 0.4% in May, the largest increase since February 2013. Indices for housing, electricity, food, airline fares, and gasoline were among the leading indices. Food prices saw their largest gain since August 2011, with prices for food rising 0.7%. Housing starts fell 6.5% in May from the month prior, but increased 9.4% year-over-year. Redbook chain store sales will be reported at 8:55 a.m. The FOMC meeting begins later today, where no substantial changes are expected from the Fed.  

Global Markets

Asian markets were mixed overnight ahead of the Federal Reserve's FOMC meeting. New figures showed foreign direct investment in China slipped 6.7% in May from a year earlier, although foreign direct investment still rose 2.8% year-over-year in the five months of 2014, registering at $48.61 billion. In Europe, stock futures saw little change as conflict in Iraq continued to drive concern among investors. The euro continues to weaken as net short position in the euro/dollar have risen to their highest level levels since May 2013. In South America, Argentina could be facing debt default by the end of the month after the US Supreme Court ruling that would force Argentina to pay billions of dollars that it defaulted on in 2001.

Twitter: @brokawbrokaw
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