Futures Lower Ahead of GDP Data

albena
30 Nov, -0001
New York City

U.S. stock futures slightly dropped in early trading, pointing to a lower opening for stocks as investors are looking ahead at the key reading on oil supply and financial results from software giant Oracle.

S&P 500 futures eased 2.1 points and Nasdaq 100 futures declined 1.5 points, a session after Tuesday's rally on growing consumer confidence and a drop in crude oil prices.

The August light crude contract lost 4 cents to $58.16 a barrel in electronic trading, while the August contract for Brent crude shed 2 cents to $57.16.

On Wednesday some Asian-Pacific stock markets were boosted by the sound gains for U.S. equities and declining oil prices, but others declined on continuing global concerns over oil demand.

In Japan, the Nikkei 225 Average closed at an 11-week high as export-related stocks advanced after the yen dropped vs. the dollar and the Dow Jones Industrial Average recorded a triple-digit gain. The drop in crude prices also bolstered the more positive market sentiment. The Nikkei Average gained 0.6%, or 63.61 points, to 11577.44, its highest since April 13. The Topix of all Tokyo Stock Exchange first section issues advanced 0.6%, or 6.38 points, to close at 1176.48.

European shares advanced on Wednesday at midday, as crude-oil prices remained at around $58 a barrel, giving a boost to oil-sensitive companies. The German DAX 30 index gained 0.2% at 4564.4, the French CAC 40 index advanced 0.5% at 4216.71 and the British FTSE 100 index rose 0.1% to 5095.

The final read on gross domestic product growth in the first three months is expected at 8:30. GDP is expected to have increased at a 3.7% annualized rate,slightly up from the previous reading of 3.5%.
Traders are also expecting the release later Wednesday of weekly U.S. inventory data which is seen to mark a drop in crude shares.

A two-day Federal Reserve meeting starts Wednesday. The central bank is expected to lift the fed funds rate on Thursday another quarter point to 3.25%.

American International Group ((AIG)) said Thursday night that first-quarter net income climbed 44% while revenue in the quarter increased 16%. Earnings came in at $3.68 billion, or $1.40 per share in the three-month period, compared with $2.56 billion, or 97 cents a share, a year ago. Revenue was $27.11 billion, up versus $23.38 billion a year earlier.

The president of Philip Morris International, the unit of Altria Group ((MO)), revealed at an investor meeting in London Wednesday that the company sees volume growth of nearly 5% for 2005. The company also expects double-digit operating income growth for 2005, despite challenges in Germany and Turkey and the recently advancing U.S. dollar.

Medtronic Inc. ((MDT)) said it has agreed to acquire privately-owned Transneuronix for $260 million. Transneuronix deals with the treatment of obesity by stimulation of the stomach with an implantable pacemaker-like device. The deal is expected to close within the week.

In earnings news, Oracle ((ORCL)), General Mills ((GIS)) and Research in Motion ((RIMM)) are among the companies slated to report their earnings Wednesday.

Analysts expect Oracle, the world's second-largest software maker, to report a 27% increase in sales vs. a year earlier, to $3.89 billion, and earnings at 23 cents a share, up 23% from the comparable period a year earlier.

General Mills ((GIS)), food company, is expected to post its earnings before the opening bell Wednesday. The company, which owns Cheerios cereal and Yoplait yogurt brands, is expected to report $0.65 per share in the quarter, versus last year's $0.74 per share.