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Pre-Market Primer: Stocks Flat After Record High


Not much news out of Berkshire's investor meeting.

After a record run on Friday following an unexpectedly good jobs report and the winding down of earnings season, stocks are flat at the start of this week.

Dow (INDEXDJX:.DJI) futures were up 0.01% at 14,899 after closing at a fresh record high on Friday. Futures contracts on the S&P 500 (INDEXSP:.INX) slipped 0.03% to 1,608.00 and Nasdaq (INDEXNASDAQ:.IXIC) futures rose 0.11% to 2,938.25.

The US economic calendar is mostly blank until Thursday after last week's bevy of data. European stocks were mostly flat today. British and Japanese markets are closed today for a holiday.

China's services sector slowed to its slowest since August 2011 in April. HSBC's (NYSE:HBC) non-manufacturing PMI survey clocked in at 51.1, down from 54.3 in March. Readings over 50 indicate an expansion of the sector.

French finance minister Pierre Moscovici declared that the European Commission's decision to give France two more years to get its budget deficit under 3% of GDP was the final nail in the austerity dogma's coffin.

"We're witnessing the end of the dogma of austerity" as the only tool to fight the euro debt crisis, Moscovici said on French radio. "We've been pleading for a growth policy for a year. Austerity on its own impedes growth."

The eurozone's composite PMI rose in April, but remains in reverse. The index rose to 46.9 from 46.5 in March, still short of the 50 threshold. Markit says that the reading suggests that the region's GDP will fall 0.4-0.5% quarterly. The analysts also expressed doubt that the European Central Bank's 25 basis point rate cut could have a discernible effect on the economy.

BMC Software (NASDAQ:BMC) shares could rise today as Reuters reported that Bain Capital and Golden Gate Capital, two private equity firms, could announce a $6.5 billion leveraged buyout of the company. Elliott Associates, another activist investor, has previously criticized BMC for missing opportunities in enterprise cloud software.

Berkshire Hathaway (NYSE:BRK.B) shares are up 2.13% at $110.95 this morning, following Warren Buffett's shareholder meeting in Omaha this weekend. Berkshire's first quarter operating profit rose to $4.9 billion, or $2,977 per share, up 41% from the year before and its book value increased by 5.5%. In the shareholder meeting, Buffett answered questions from hedge fund critic Doug Kass. According to the Wall Street Journal, Kass asked how Buffett's son Howard is qualified to be non-executive chairman of the company. Buffett reportedly handled the question well and said that Howard's role will be to keep Berkshire's culture alive after he himself retires or dies.

Mobile technology market analyst Horace Dediu of Asymco said that Apple (NASDAQ:AAPL) is missing out on 2.8 billion customers in emerging markets because of the requirements that it places on mobile carriers. To carry the iPhone, carriers must agree to hefty handset subsidies and minimum sales requirements.

Twitter: @vincent_trivett
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