Stock index futures dipped on Wednesday, a day after major indexes hit a five-month high, with pressure on the euro testing the recent view that the U.S. market was decoupling from Europe.
* The main data release of the day will be the Beige Book, the Federal Reserve’s anecdotal information on current economic conditions from around the United States. The report, due at 2 p.m. EST may offer more evidence the economy’s health is slowly being restored.
* The euro dropped to a near 16-month low against the dollar after Fitch said the European Central Bank should do more to resolve the region’s debt crisis, prompting nervous investors to sell the single currency.
* “Yesterday’s rally was excellent, said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. “A pullback here would be expected and eyes will be on the euro as we test the decoupling theory and whether it was a one-day wonder.”
* S&P 500 futures fell 4.5 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures dropped 51 points, and Nasdaq 100 futures lost 6.75 points.
* U.S. equities have been struggling to delink from the performance of the single currency, a trend that became the norm in the last quarter of 2011 as traders fretted over possible sovereign defaults in the euro zone.
* New York state’s financial regulator is investigating several large banks, including Bank of America Corp (BAC.N) and Citigroup Inc (C.N) to determine if they overcharged customers on certain insurance policies, a source said.
* Clothing retailer Urban Outfitters Inc (URBN.O), grappling with piled-up inventory and declining margins, said its chief executive resigned unexpectedly, sending the company’s shares tumbling 18 percent in premarket trading.
* U.S. stocks climbed to a five-month high on Tuesday, led by materials stocks after an upbeat forecast by aluminum company Alcoa and strong gains in bank shares.
Stocks to watch today include Urban Outfitters, Marathon Petroleum and more.
Urban Outfitters disclosed its chief executive, Glen T. Senk, had resigned on Monday to pursue another opportunity and said co-founder and Chairman Richard A. Hayne would take on the CEO post, effective immediately. Shares plunged 14% to $25.15 in recent premarket trading. The apparel retailer said Senk will remain with the company for a period of time to assist with the transition.
Marathon said it expects to swing to a small fourth-quarter loss as higher crude oil prices weighed on bottom-line results. Shares fell 4.2% to $30.50 premarket.
Carl Icahn dropped his attempted hostile takeover of Commercial Metals as the billionaire activist investor didn’t receive tenders for his self-imposed threshold of 40.1% of the scrap-metal processor’s stock. Shares were down 6.8% to $13.75 premarket.
Lennar Corp.’s fiscal fourth-quarter earnings fell 5.5%, reflecting a weak real-estate market, though the homebuilder’s revenue grew and its margins improved. Shares were down 0.5% to $20.66 premarket.
Crocs Inc. said its fourth-quarter revenue will be at the high end of its expectations and said it expects its full-year revenue to exceed $1 billion for the first time in the footwear company’s history. Shares jumped 5.4% to $16.81 in premarket trading.
Synnex Corp. fiscal fourth-quarter earnings rose a better-than-expected 34% as the information-technology distributor continued to post sales growth and margins strengthened. Shares were up 4.4% at $33.50 in recent premarket trading as the company also gave a mostly upbeat view for the current quarter.
Bank of America Merrill Lynch downgrades Unilever to underperform from neutral and cuts its price target, saying the company is one of the most expensive stocks in its consumer-staples universe, trading at a 10% premium versus a historical 10% discount to parity. It expects the management to issue a cautious 2012 outlook at its full year results in early February. Shares were down 3.6% to $32.12 in premarket trading.
Hewlett-Packard Co. named EBay Inc. veteran Henry Gomex as its new chief communications officer, a newly expanded role at the technology giant. Gomez, 48, will report to Hewlett-Packard President and Chief Executive Meg Whitman, who took charge of the company in September after leading eBay as its CEO for a decade through 2008. Shares edged down 0.2% to $26.65 in premarket trading.
Arena Pharmaceuticals Inc. is selling $16.5 million in stock at a 5.1% discount to its Tuesday close. It will also sell some preferred convertible shares. The biotechnology company’s shares fell 5.1% to $1.66 in premarket trading.
Alcohol producer China New Borun Corp. said Tuesday it has signed presales contracts worth about 90% of its total output capacity this year. Shares jumped 19% to $3.97 in premarket trading.
Overnight Headlines (Links)
WORLD and U.S.
Romney Wins New Hampshire Primary
German GDP Likely Shrank in Late 2011
Geithner Presses China on Iran
Iran Scientist Killed in Bomb Blast
CORPORATE
Spanish Banks Build Way Out of Home Glut
MARKETS
Europe Fears Rising Greek Cost
Economics/FedSpeak
- At 5:15 a.m. ET Germany sells some 5-year debt.
- At 8:30 a.m. Atlanta Fed President Dennis Lockhart speaks.
- At 8:40 a.m. Chicago Fed President Charles Evans speaks.
- At 12:30 p.m. Philadelphia Fed President Charles Plosser speaks.
- At 1:00 p.m. the Treasury Department auctions 10-year notes.
- At 2:00 p.m. we get the Fed’s Beige Book report, chock-full of anecdotes about the economy.
Key Earnings
Before the open, we get results from Lennar and SUPERVALU.