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Pre-Market: American Apparel Gets Turnaround Help From Standard General; Archer Daniels Midland Acquires Wild Flavors


Gallup numbers show US consumer spending fell in June.

Stock futures pointed toward a lower open on Monday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures fell 0.24% to 16,936. Nasdaq (INDEXNASDAQ:.IXIC) futures moved lower, falling 0.24% to 3,906.25.  Futures on the S&P 500 (INDEXSP:.INX) were down 0.27% to 1,972.20.


American Apparel (NYSEMKT:APP) is working with New York-based hedge fund Standard General -- which controls a 43% stake in the company -- to secure funding that would allow the Los Angeles, California-based retailer to pay off a $10 million loan and replace all but two members of its board, the Wall Street Journal reports. Standard General is reportedly awaiting the outcome of an investigation into American Apparel's former CEO Dov Charney, who was ousted in June over claims he misused company funds and was engaged in sexual misconduct. If cleared, there is a possibility that Charney will remain with American Apparel, although not necessarily as CEO. Shares of American Apparel, which have fallen 29.3% year-on-year, were flat in pre-market trading.

Samsung (OTCMKTS:SSNLF) is expected to show earnings fell 12.6% in the past quarter, according to a Thomson Reuters poll, marking the third straight quarter of declining profits for the Galaxy smartphone maker. Analysts believe the South Korea-based conglomerate's top-end Galaxy S5 handset, which was released in March, isn't selling well enough to make up for poor shipments of other devices, and that cheaper models being offered by competitors, as well as Apple's (NASDAQ:AAPL) upcoming iPhone 6, pose serious threats. At a corporate level, company chairman Lee Kun-hee has been hospitalized since May, and the succession plan for his three children is still unknown.

Archer Daniels Midland Co. (NYSE:ADM) will acquire privately-held Wild Flavors GmbH for approximately $3 billion in cash, the US-based global food processing and commodities trading company's largest takeover to date. Erlanger, Kentucky-based Wild Flavors, which has production facilities across Europe, the Middle East, Asia, and the Americas, manufactures flavorings, colors, and ingredients for over 3,000 customers worldwide. Their most well-known consumer-facing product is the popular pouched fruit juice drink CapriSun. ADM beat out a bid from Japan's Ajinomoto Co. (OTCMKTS:AJINY) to win Wild Flavors, which comes with $136 million in debt.

German auto maker Daimler AG (OTCMKTS:DDAIF) believes sales of its Mercedes-Benz brand in China will outpace competitors Audi (OTCMKTS:AUDVF) and BMW (OTCMKTS:BAMXY) by number of cars sold, thanks to a new strategy centered around its new S-Class model. Mercedes-Benz had previously led the market in China until 2012, when demand stalled and sales volume dropped well below BMW's and Audi's. Daimler is aiming to raise sales by 300,000 -- one-third of its current sales -- cars per year by 2015.


Today's light economic calendar kicked off with the Gallup US Consumer Spending measure, which showed daily spending fell slightly in June, averaging at $91 for the month. That's down from a six-year high of $98 in May and nearly in line with the $90 average reported last June. At 12:30 p.m., TD Ameritrade will release its Investor Movement Index, a behavior-based index aimed at measuring Main Street sentiment. At 3:00 p.m., the US Treasury will publish its Separate Trading of Registered Interest and Principal of Securities (STRIPS) report.

Global Markets

Asian stocks saw little change overnight. A Reuters poll projected China's economy likely steadied at 7.4% in the second quarter, signaling government intervention has had an effect. German Chancellor Angela Merkel has began her tour of China, where after meeting with Premier Li Keqiang, Keqiang announced German companies would be allowed to invest up to $12.9 million in Chinese stock exchanges. European stocks dropped following their biggest weekly rally in three months. In England, large companies are showing a subdued appetite for risk over the past three months according to a quarterly survey by accountants at Deloitte, which raises the following question: Will England's rapid rebound begin to cool in the coming months?

Speaking at an event in France on Sunday, International Monetary Fund managing director Christine Lagarde said that public investment could be appropriate for certain countries given the current outlook of weak global growth and low borrowing costs.

Twitter: @brokawbrokaw
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