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Pre-Market: Microsoft Finalizes 'Risky' Nokia Deal; Alibaba IPO Could Top $20 Billion


Earnings season winds down with reports from Amazon, Honda, Ford, and others.

Stock futures were lower ahead of the week's final trading session as earnings season winds down. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures fell 0.29% to 16,371. Futures on the S&P 500 (INDEXSP:.INX) were down 0.29% to 1,867.60. Nasdaq (INDEXNASDAQ:.IXIC) futures moved lower, falling 0.46% to 3,568.25.


Microsoft (NASDAQ:MSFT) has completed what the New York Times calls the software giant's riskiest deal in the company's 39-year history. Nokia (NYSE:NOK) released a statement on Friday morning announcing the sale of its mobile phone business to Microsoft for roughly $7.5 billion. The purchase makes Microsoft the world's second-largest maker of mobile phones, and will expand the company's workforce force by 30,000 employees. The news comes a little over 12 hours after Microsoft reported third-quarter earnings, which came in above expectations at $6.06 billion in net income. Shares of Microsoft were up 1.66% in pre-market trading. Nokia rose 1.92%.

In other earnings news, Amazon (NASDAQ:AMZN) saw revenue grow 23% to nearly $20 billion in the first quarter, up from $16 billion a year ago. Ford (NYSE:F) reported a 39% drop in net profits this morning, thanks in part to $400 million in warranty reserves Ford added to older vehicles in North America. Honda (NYSE:HMC) saw its fiscal fourth-quarter profits more than double from a year ago, although the company forecasts profit growth in FY 2015 will grow slower at 3.6%. Ahead of the opening bell, Amazon fell 5.05% and Ford fell 2.27%.

Bank of America (NYSE:BAC) could be forced to dish out over $13 billion in the settlement of multiple state and federal investigations into the bank's sale of mortgage-backed bonds leading up to the 2008 financial crisis. If the Justice Department wins its case, payments by Bank of America would beat a record payment by JPMorgan Chase (NYSE:JPM) doled out in a similar case last year. Shares of Bank of America were down 1.29% in pre-market trading.

In other settlement news, Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Intel (NASDAQ:INTC), and Adobe (NASDAQ:ADBE) will collectively pay $324 million to settle an antitrust class-action lawsuit that accused the companies of conspiring to suppress salaries in Silicon Valley.

The Wall Street Journal reports that Chinese e-commerce giant Alibaba is considering the expansion of its initial public offering to over $20 billion, making it the largest IPO in US history. The size of the IPO had originally been tagged at $15 to $16 billion.

The Economy

A quiet day for economic indicators will be led by the Purchasing Managers' Index US Services Flash reading at 9:45 a.m.; it will give investors a picture of the private sector services economy. At 9:55 a.m., the Reuters/University of Michigan consumer sentiment index will give an indication of the strength of consumer spending.

Global Markets

Asian stocks declined for a second session overnight. Japan's inflation grew at its fastest pace since 1992, up 2.7% from a year prior. President Obama finished his visit to Japan, but failed to resolve issues with a trade deal that's seen as vital to a regional pact. Meanwhile, Obama is expected to ask European leaders to join the US in imposing new sanctions against Russia. Russia has been downgraded by Standard and Poor's to BBB-, one grade above junk, as Russia began military exercises along its border with Ukraine yesterday. European stocks declined as tensions in the region grew worse.

Twitter: @brokawbrokaw
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