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Pre-Market Primer: Stocks Flat as Trade Deficit Rises


Pandora's box is open for formidable competition from Apple.

Stock futures were little changed this morning after the US trade deficit came in narrower than expected.

America imported $40.3 billion more than it exported in April, up from $38.8 billion in March, a change partially driven by an increase in fuel imports.

Dow (INDEXDJX:.DJI) futures are off 0.01% at 15,215 while S&P 500 (INDEXSP:.INX) futures rose 0.05% to 1,637.00 and future contracts on the Nasdaq (INDEXNASDAQ:.IXIC) index climbed 0.09% to 2,988.25.

After getting slammed yesterday, the Nikkei (INDEXNIKKEI:.NI225) rallied over 2%, but it is declining after-hours. Japan's prime minister is pushing the country's public pension funds to raise their equity allocations, which could be problematic if the funds sell off their government bonds, which could raise Japan's low interest rates. European indices are mostly higher today.

Two Federal Open Markets Committee voting members, Sarah Bloom Raskin and Esther George, will make speeches today. Their comments might move markets if they hint at the Fed's plans on continuing or ending quantitative easing. Yesterday, Atlanta Fed President Dennis Lockhart said that he does not favor tapering off the stimulus plan just yet.

Jaime Caruana head of the Bank of International Settlements warned of the rocky road ahead if central bankers abandon loose monetary policy.

"While central banks surely have all the tools necessary to technically engineer an exit and will doubtless do their utmost to communicate properly with market participants, it cannot be taken for granted that the process will be smooth," he said in a speech in Seoul, South Korea. "A global steepening of yield curves could hit the capital of financial institutions, to the extent that they hold their government's debt, and worsen debt sustainability."

Zynga (NASDAQ:ZNGA) had its biggest drop in 10 months yesterday when it announced that it will lay off 520 employees, about a fifth of its staff. It will also close its offices in New York, Dallas, and Los Angeles.

Pandora (NYSE:P) fell 10.6% yesterday on rumors that Apple (NASDAQ:AAPL) might unveil an Internet music-streaming service at its developers' conference next week. Pandora also faces competition from Google's (NASDAQ:GOOG) new Listen Now service, which debuted last month.

General Motors (NYSE:GM) shares rose 2.7% in pre-market trading after announcing that it will join the S&P 500 index, replacing H.J. Heinz (NYSE:HNZ) which Warren Buffett is taking private.

Tesla Motors (NASDAQ:TSLA), the electric car company, holds its shareholder meeting this afternoon. Yesterday, shares sank 5.29%.

Twitter: @vincent_trivett
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