MarketWatch.com - Pre-Market Indications

Monday, May 17, 2010

Indications: Stock futures slip on Lowe's downbeat forecast

Stock Assault 2.0 - Artificial Intelligence Stock Market Software Alert Email Print

By Steve Goldstein, MarketWatch

NEW YORK (MarketWatch) -- U.S. stock futures edged lower on Monday after home-improvement retailer Lowe's Cos. offered an outlook short of expectations, casting doubt on coming results from others in its sector in coming days.

Retreating from mild gains, S&P 500 futures fell 1.6 points to 1,133.7 and Nasdaq 100 futures declined3 points to 1,906.75. Futures on the Dow Jones Industrial Average were off 19 points at 10,590.

Worries about Chinese tightening and European austerity measures combined to knock U.S. stocks on Friday, with the Dow Jones Industrial Average sliding 162 points.

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The Chinese tightening concerns were very much in the market on Monday -- the Shanghai Composite tumbled 5.1% -- but Europe stocks advanced as financials gained ground and as BP /quotes/comstock/13*!bp/quotes/nls/bp (BP 46.87, -1.23, -2.56%) climbed after the oil giant was able to successfully insert a tube into the broken pipe leaking oil in the Gulf of Mexico. See Europe Markets story. See Asia Markets story.

"The risk is that any resurgence could be short-lived as investors keep a wary eye on government debt," said David Jones, chief market strategist at IG Index.

The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.2340, -0.0012, -0.0972%) fell to a four-year low but has crawled off worst levels, trading above $1.234 in early New York action.

Oil futures turned lower, off 43 cents at $71.18 a barrel.

The New York Federal Reserve Bank reported manufacturing activity in the region improved at a slower pace in May, with the bank's Empire State Manufacturing index lapsing to 19.1 from 31.9 in April.

Still to come, Treasury inflow data for March and the NAHB home builders index for May.

Lowe's /quotes/comstock/13*!low/quotes/nls/low (LOW 26.07, -0.18, -0.69%) fell nearly 4% as the home improvement retailer reported a 3% profit rise and gave a cautious outlook. Unlisted car giant General Motors reported $900 million in earnings on revenue of $31.5 billion for the first quarter.

There was plenty of activity on the merger front Monday.

After a delay of over a week, Prudential /quotes/comstock/13*!puk/quotes/nls/puk (PUK 15.84, -0.83, -4.98%) received regulatory approval for its deal to buy the AIA unit of American International Group /quotes/comstock/13*!aig/quotes/nls/aig (AIG 39.72, -0.93, -2.29%) for $35.5 billion. Prudential priced a $21 billion sale of shares to existing investors. The deal still needs to be approved by the U.K. insurer's shareholders.

Astellas Pharma /quotes/comstock/11i!alpmy (ALPMY 33.71, -0.48, -1.40%) said it will buy OSI Pharmaceuticals /quotes/comstock/15*!osip/quotes/nls/osip (OSIP 59.80, +2.54, +4.44%) for $4 billion in cash, a 55% premium to the last trading day before the Japanese firm first tendered an offer for the U.S. biotech. OSI shares lost 4% in early premarket action.

Man Group said it will buy fellow hedge fund manager GLG Partners /quotes/comstock/13*!glg/quotes/nls/glg (GLG 2.91, -0.11, -3.64%) for $1.6 billion, or $4.50 a share, which is a 55% premium to Friday's close. GLG shares jumped 51% in premarket trade.

Universal Health /quotes/comstock/13*!uhs/quotes/nls/uhs (UHS 39.04, +1.34, +3.55%) said it will buy psychiatric facility operator Psychiatric Solutions /quotes/comstock/15*!psys/quotes/nls/psys (PSYS 32.63, +0.63, +1.97%) for $2 billion, or $33.75 a share.

Steve Goldstein is MarketWatch's London bureau chief.


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