U.S. Stock Futures Indicate Recovery

Elena
13 Aug, 2007
New York City

U.S. stock futures pointed to recovery Monday, following a week of steep declines amid worries about the impact of subprime-mortgage defaults over the economic growth. However, overseas central banking injections helped relieve tensions. Banks are expected to release updates on the hits they have taken from the subprime crisis. Citigroup reportedly lost more than $700 million in credit business in recent weeks.

[R]09:00AM U.S. stock futures indicated a higher opening after recent steep declines.[/R]

U.S. stock futures pointed to recovery Monday, following a week of steep declines amid worries about the impact of subprime-mortgage defaults over the economic growth. However, overseas central banking injections helped relieve tensions. Banks are expected to release updates on the hits they have taken from the subprime crisis. Citigroup ((C)) reportedly lost more than $700 million in credit business in recent weeks.

In other corporate news, home builder Hovnanian Enterprises ((HOV)) added 1.4% in pre-market trading after it said it delivered 31% fewer homes in Q3. Sears Holdings ((SHLD)) warned on Q2 profit but added $1.5 billion to its stock buyback authorization plan. Sears shares rose 1.4%.

Among pre-market highlights, Blackstone Group ((BX)) jumped 6% after it posted a stronger-than-expected Q2 profit. The private-equity house also posted a loss of $52.3 million during the last 11 days of Q2 and warned that challenging financial market conditions continue.

On the economic news front, the Commerce Department said that U.S. retail sales rebounded in July, with total sales rising 0.3%, slightly below expectations of an increase by 0.4%. Stock futures accelerated throughout the morning. S&P 500 futures rose 17.1 points at 1,468.10 and Nasdaq 100 futures climbed 22.5 points at 1,951.50. Dow industrial futures rose 128 points.


[R]8:00AM Akzo Nobel agreed to acquire ICI for $16.2 billion.[/R]

Akzo Nobel ((AKZOY)), Dutch chemicals group, announced on Monday an agreement to acquire U.K. rival Imperial Chemical Industries in a cash deal worth 8 billion pounds ($16.2 billion) , or 670 pence a share. The transaction represents a 22% premium on the share price before the U.K. group announced it had received an approach in June. Akzo Nobel said that in addition to the bid price, ICI shareholders will also receive a second interim dividend of 5 pence a share.

Akzo''s previous offers of 7.2 billion pounds and then 7.8 billion pounds had been rejected by ICI. The acquisition of the maker of Dulux paints is expected to boost its coatings industry, enabling it to increase its global market share, as well as its presence in emerging markets, where ICI makes roughly a third of its sales.