U.S. stock index futures pointed to a lower open for Wall Street on Monday as a European manufacturing data showed the slowdown spreading to the core of the euro zone sending European stocks lower.
Upbeat manufacturing data from China had earlier eased investor concerns of a hard landing in the world’s second largest economy.
Data released on Sunday showed China’s Purchasing Managers’ Index jumped to an 11-month high of 53.1 in March, up from 51 in February. Asia and European shares both rose in early trade on Monday on the news but European shares fell in the red as manufacturing in the euro zone shrank for the eight consecutive month in March.
On the U.S. macroeconomic front, the Institute for Supply Management will release data for March’s manufacturing index at 10 a.m. New York time. Economists polled by Briefing.com expect a reading of 53.0, up from 52.4 in February.
Monthly construction spending data will also be released at 10 a.m. on Monday. Economists polled by Briefing.com forecast construction spending rose by 0.5 percent in February, against a 0.1 percent fall in January.
The euro zone’s manufacturing sector shrank for an eighth month and at a faster pace in March, adding to signs the bloc is in recession as the downturn spread to core members France and Germany, a survey showed on Monday.
Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.7 last month from 49.0 in February, in line with a preliminary reading. It has now been below the 50 mark that divides growth from contraction since August.
Euro zone manufacturers suffered a miserable March. Ongoing steep downturns in the periphery are now being accompanied by signs of renewed weakness in countries such as Germany and France,” said Chris Williamson at data provider Markit.
Earlier data from Germany, Europe’s largest economy, showed its manufacturing sector contracted last month and it was a similar story in neighboring France.
In Spain, struggling to implement swingeing austerity measures demanded by the European Union to meet tough deficit targets, the sector contracted for the 11th month. Manufacturing in Italy shrank for an eighth month.
Unemployment in the euro zone reached its highest level in almost 15 years in February, with more than 17 million people out of work, and economists said they expected job office queues to grow even longer later this year.
Joblessness in the 17-nation currency zone rose to 10.8 percent – in line with a Reuters poll of economists – and 0.1 points worse than in January, Eurostat said on Monday.
Fragrance maker Coty Inc. offered to acquire Avon Products Inc. (AVP) in a cash deal that values the struggling door-to-door beauty products seller at roughly $10 billion. Coty is offering $23.25 a share to Avon shareholders, a 20% premium to Friday’s closing price. Shares jumped 20% in premarket trade Monday to $23.32. Avon said Monday the bid is opportunistic and substantially undervalues the company, adding it remains confident in its stand-alone prospects and is committed to its previously announced CEO search.
Groupon lowered its reported fourth-quarter results after the daily-deals service discovered it had to set aside more money for customer refunds. Auditor Ernst & Young also discovered a “material weakness in its internal controls” for the year, prompting shares to slump 11% to $16.31 premarket.
Keryx Biopharmaceuticals Inc. (KERX) and Aeterna Zentaris Inc. (AEZS) reported the combined use of perifosine and the chemotherapy-drug capecitabine as a treatment for refractory advanced colorectal cancer didn’t meet a Phase 3 clinical trial’s primary endpoint. Shares of Keryx dropped 52% to $2.39 premarket and Aeterna was down 64% at 78 cents as the companies said the study of 468 patients at 65 U.S. sites found perifosine with capecitabine didn’t improve the overall survival rate when compared with capecitabine alone.
Towerstream Corp. (TWER) has signed a Wi-Fi agreement with a national wireless carrier utilizing its current and future rooftop assets, the company said in a filing with the Securities and Exchange Commission late Friday. Shares of the wireless broadband network services provider jumped 25% to $5.95 premarket.
AVI BioPharma Inc. (AVII) said a 24-week study showed that eteplirsen had a statistically significant effect in raising the level of a key protein, dystrophin, in boys with Duchenne muscular dystrophy. Shares of AVI BioPharma tumbled 29% to $1.10 premarket.
“The Hunger Games” reached $251 million in domestic box-office receipts, according to preliminary studio estimates, and handily fended off two newcomers to remain in the No. 1 spot for the second weekend in a row. Shares of Lions Gate Entertainment Corp. (LGF) added 1.7% to $14.15 in recent premarket trading.
Hartford Financial Services Group Inc. (HIG) agreed to buy back $2.43 billion in securities from Allianz SE (ALIZF, AZSEY, ALV.XE) in order to give the company financial flexibility and improve its capital structure. Hartford shares inched up 1.4% to $21.37 premarket.
Ener1 Inc. (HEVVQ), a manufacturer of rechargeable car batteries, said it emerged from Chapter 11 bankruptcy as a privately held company.
Medtronic Inc. (MDT) said it reached an agreement in principle to settle all claims in a previously disclosed federal shareholder class action for $85 million.
Huntington Bancshares Inc. (HBAN) agreed to acquire the assets and deposits of a failed Michigan bank, in a Federal Deposit Insurance Corp.-assisted takeover, adding to the regional bank’s footprint.