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Pre-Market: Google Eyes Stake in Virgin Galactic; Producer Price Index Falls Unexpectedly


Global stocks retreat on higher oil prices.

Stock futures pointed toward a mixed open on Friday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures fell 0.07% to 16,667. Futures on the S&P 500 (INDEXSP:.INX) were down 0.06% to 1,922.10. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.05% to 3,766.25. 


Google (NASDAQ:GOOG) is reportedly in talks with Virgin Galactic to acquire a stake in the space-exploration company that would give Google access to Virgin's satellite-launching technology. This would facilitate Google's ambitions to launch hundreds of satellites into low-earth orbit in order to provide Internet access to the next billion Internet users. Insiders say the deal will see Google investing hundreds of millions of dollars into a joint venture and spending $30 million to acquire a small stake in Virgin Galactic. The news comes a day after Google acquired start-up satellite venture Skybox Imaging for $500 million. Google was down 0.45% in pre-market trading.

BlackBerry (NASDAQ:BBRY) will provide a secure transaction platform for EnStream LP, a mobile-payments platform owned by Canada's three largest mobile carriers, Rogers Communications Inc (NYSE:RCI), BCE Inc (NYSE:BCE), and Telus Corp (NYSE:TU) in a three-year deal. Using BlackBerry's infrastructure, EnStream will facilitate the storage of payment card details on smartphones, allowing consumers to pay for things by simply tapping their phones. Banks already involved in the platform include Royal Bank of Canada (NYSE:RY), Toronto-Dominion Bank (NYSE:TD), and Canadian Imperial Bank of Commerce (NYSE:CM). BlackBerry fell 0.49% ahead of the opening bell.

Intel (NASDAQ:INTC) has said its annual sales will increase for the first time since 2011 and has upgraded its second-quarter earnings forecast. Second-quarter sales are expected to be 13.7 billion with a $300 million margin. While consumers have been choosing smartphones and tablets over desktops and laptops, corporate demand has been a big driver of new PC purchases after Microsoft (NASDAQ:MSFT) discontinued support for Windows XP  earlier this year and companies have been forced to replace computers able to run newer operating systems. Intel rose 6.76% in pre-market trading.

Caterpillar (NYSE:CAT) has been struck with at least 15 lawsuits over allegations that its engines in trucks, charter buses, and school buses sold between 2006 and 2010 were susceptible to breaking down and catching fire. Caterpillar recently paid out $46 million to settle a lawsuit claiming defects in a marine engine that caught fire six years ago in Mobile, Alabama. Caterpillar stopped making truck and bus engines in the US markets four years ago because of high costs and small market share. The engine business accounted for 60% of Caterpillar's operating profit last year. Shares of Caterpillar were down 0.35% in pre-market trading.  


The producer price index fell unexpectedly in May, with wholesale prices sinking 0.2%. Omitting food, energy, and trade, prices remained relatively flat. The price of goods as well as the price of services both fell 0.2% in May. Personal consumption -- which is intended to be an indicator of the consumer price index -- fell 0.2%. At 9:55 a.m. the Reuter's/University of Michigan consumer sentiment index will arrive.

Global Markets

Asian stocks fell overnight  as airlines pulled back on higher oil prices. Concern that the situation in Iraq will escalate drove oil as high as $106 per barrel, its highest close in nearly nine months. In Japan, stocks fell for a second day, as the Bank of Japan decided to stick with its expansion rate of $668 billion per year. Meanwhile, Japanese Prime Minister Shinzo Abe announced a plan that would cut the corporate tax rate below 30% in a bid to spur growth. In Europe, stocks declined on the escalating violence in Iraq as well. In England, the government said it would push forward new measures to restrict mortgage lending. In the Ukraine, fighting continued as Ukrainian government forces reclaimed the port of Mariupol from pro-Russian separatists.
Twitter: @brokawbrokaw
No positions in stocks mentioned.
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