Durable goods data knock mood on Wall St
25 September 2009, by Samantha Pearson in New York (The Financial Times)
http://www.ft.com/cms/s/0/0985689e-a125-11de-a88d-00144feabdc0.html?ftcamp=rss&nclick_check=1US stocks were set for a lower start on Friday following disappointing data on durable goods orders.
New orders for durable goods dropped 2.4 per cent in August, clearly missing expectations of a 0.4 per cent increase. In July, orders rose 4.8 per cent thanks to the ‘cash-for-clunkers’ scheme which boosted auto sales.
Investors will also be waiting for data on new home sales due out after the opening bell.
S&P 500 futures were 2.9 points lower at 1,041.40, trading below fair value. Futures for the Dow Jones Industrial Average fell 17 points to 9,618.
Nasdaq futures were down 7.5 points at 1,692, also trading below the fair value reading.
Research In Motion, which makes Blackberry phones, posted quarterly results just above analysts’ estimates late on Thursday but gave a disappointing outlook. Goldman Sachs also cut its rating on the stock to ”neutral” from ”buy,” saying it had doubts about the company’s ability to maintain market share in North America. The shares were down 14.2 per cent at $71.32 in pre-market trading.
Unilever agreed to pay $1.87bn for the personal care brands of Sara Lee. Sara Lee, which makes Radox shower gel and Brylcreem, said it was looking to sell the rest of its household goods business and was also planning to launch a $1bn share buyback programme. Sara shares gained 7.6 per cent to $11.34, while shares in the Anglo-Dutch company edged up slightly in London trading.
After speculation earlier this week, Ford confirmed that it was planning to build a new $490m plant in China. The car maker also said it expected to return to the black in 2011. The shares dropped 0.4 per cent to $7.30.
In the pharmaceutical sector, Allos Therapeutics jumped 12 per cent to $9.21 after it secured approval for a drug designed to treat lymphoma.
KB Home, the Los Angeles-based homebuilder that targets first-time buyers, posted a narrower loss for its third quarter after cutting costs and focusing on selling smaller houses. However, the company’s chief executive said he did not expect to see any ”meaningful improvement” in the US housing market in the near future. The shares fell 6.2 per cent to $17.40.
The pessimism spread to KB’s rivals and Toll Brothers, the luxury homebuilder, fell 0.5 per cent to $20.10.
On Thursday, the S&P lost over 1 per cent after disappointing data from the National Association of Realtors on existing home sales.
Caterpillar, which closed more than 2 per cent lower on both Wednesday and Thursday due to falling commodity prices, was upgraded to ”outperform” from ”neutral” by Credit Suisse. The shares were flat at $51.85 before the opening bell.
European stocks were mixed before the opening on Wall Street. The FTSE Eurofirst 300 index was 0.2 per cent higher at 989.14.
Asian equity markets closed mainly lower, led by a 2.6 per cent decline in Tokyo’s Nikkei index.
Bond yields were mainly lower. The yield on the two-year Treasury note was two basis points higher at 0.960 per cent, while the 10-year Treasury note was down three basis points at 3.353 per cent.
The dollar index, which tracks the US currency’s progress against a basket of the world’s main currencies, dropped 0.1 per cent.
Gold was trading 0.7 per cent lower at $987.08 per ounce and oil prices were also slightly lower. The price of US crude fell 65 cents to $65.24 a barrel.
Durable goods data knock mood on Wall Street
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