- Pre-Market Indications

Thursday, April 28, 2011

Indications: U.S. stock futures fall further after data

Stock Assault 2.0 - Artificial Intelligence Stock Market Software

By Kate Gibson and Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) â€" U.S. stock-market futures fell further Thursday after data showing the economy weakened in the first quarter and jobless claims topping 400,000 for another week.

The Commerce Department said gross domestic product rose at a 1.8% annual rate between January and March, slower than the 3.1%-pace in the prior quarter. Separately, the Labor Department said those filing initial claims for jobless benefits rose 25,000 to 429,000 last week.

Stock futures were already lower amid a crush of earnings results as investors paused for breath after the prior two-day rally.

Futures for the Dow Jones Industrial Average /quotes/comstock/21b!f:dj\m11 DJM11 +0.06%   fell 20 points to 12,621, while futures for the Standard & Poor’s 500 index /quotes/comstock/21m!f:sp\m11 SPM11 +0.04%   slipped 2.4 points to 1,348.6. Futures for the Nasdaq 100 /quotes/comstock/21m!f:nd\m11 NDM11 -0.03%   shed 4.75 points to 2,404.25.

Bernanke: QE2 is not a panacea

Ben Bernanke says the Federal Reserve doesn't expect the end of QE2 to have a significant market impact, and that quantitative easing has been successful, but it was never intended as a cure-all.

On Wednesday, the Dow /quotes/comstock/10w!i:dji/delayed DJIA +0.57%  rose 0.8% to close at 12,690.96, its highest since May 20, 2008. The Nasdaq Composite /quotes/comstock/10y!i:comp COMP +0.09% knocked out a 2007 closing high to finish at its best level since Dec. 12, 2000.

Speaking at the Federal Reserve’s first post-statement press conference Wednesday, Federal Reserve Chairman Ben Bernanke said the central bank will maintain its easy monetary policy and isn’t mulling any quick policy moves to fight higher inflation or slower growth.

“I think to some extent Bernanke is walking a tightrope, and this time he managed to stay on the rope,” but he could face problems down the road, said Steen Jakobsen, chief economist at Saxo Bank.

For now, Jakobsen said he doesn’t see anything stopping the S&P 500 /quotes/comstock/21z!i1:in\x SPX +0.36%  from moving to 1,385, then 1,400, except the start of a true dollar crisis.

“If it moves from orderly to disorderly, we could have an equity impact” and a problem for the Fed, he said.

The dollar continued to lose ground in Asian and European trading hours, with the dollar index /quotes/comstock/11j!i:dxy0 DXY -0.0068%  lately off to 73.16. The dollar index measures the greenback against a basket of six major currencies.

Gold prices continued to gain on back of dollar weakness, with June futures /quotes/comstock/21e!f:gc\m11 GCM11 +0.31%  up $14.50 to $1,531.60 an ounce on Nymex.

The corporate schedule was full, with a flood of earnings results and a deal announced ahead of the open. Exelon Corp. /quotes/comstock/13*!exc/quotes/nls/exc EXC +1.66%  will acquire Constellation Energy Group Inc. /quotes/comstock/13*!ceg/quotes/nls/ceg CEG +5.71%  in a stock deal valued at about $7.9 billion, the companies said in a statement.

Shares of Akamai Technologies Inc. /quotes/comstock/15*!akam/quotes/nls/akam AKAM -14.74%  sank in preopen trading. The company said late Wednesday that first-quarter profit rose almost 24%, but its second-quarter outlook fell short of Wall Street estimates.

Shares of Sprint Nextel Corp. /quotes/comstock/13*!s/quotes/nls/s S +6.68%  rose in premarket trading after the wireless company reported a first-quarter loss of 15 cents a share.

Shares of Aetna Inc. /quotes/comstock/13*!aet/quotes/nls/aet AET +4.12%  gained before the bell, after announcing a 4% increase in first-quarter profit and said it will buy Prodigy Health Group, a third-party administrator of self-funded health plans, for $600 million.

Shares of Dow Chemical Co. /quotes/comstock/13*!dow/quotes/nls/dow DOW +1.98%  added in the premarket after the company reported a higher first-quarter profit.

U.S.-listed shares of Deutsche Bank AG /quotes/comstock/13*!db/quotes/nls/db DB +5.29%   /quotes/comstock/11e!fdbk DE:DBK +5.06%  climbed in premarket trade after the company said its first-quarter profit rose 17%, helped by a string of acquisitions. Read about Deutsche Bank’s results.

But U.S.-listed shares of SAP AG /quotes/comstock/13*!sap/quotes/nls/sap SAP -6.94%   /quotes/comstock/11e!fsap DE:SAP -6.50%  tumbled in preopen trading after the German software group posted a 4% increase in net profit, but missed analysts’ forecasts.

After the close of markets, Microsoft Corp. /quotes/comstock/15*!msft/quotes/nls/msft MSFT +1.25% is due to report its quarterly results.

In overseas markets, European stocks traded higher, supported by well-received corporate updates from Deutsche Bank, Banco Santander /quotes/comstock/13*!std/quotes/nls/std STD +2.63%   /quotes/comstock/06x!e:san ES:SAN +1.49%  and Bayer AG /quotes/comstock/11e!fbayn DE:BAYN +2.21% . Read about Europe markets.

Stocks jumped in Tokyo, but Shanghai and Hong Kong markets fell. Read about Asia markets.

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Kate Gibson is a reporter for MarketWatch, based in New York. Barbara Kollmeyer is an editor for MarketWatch in Madrid.

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