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By Tom Stoukas
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U.S. stock-index futures fluctuated between gains and losses as German manufacturing unexpectedly contracted while Cyprus’s president worked on a new plan to obtain a European bailout.
Oracle Corp. (ORCL) plunged 7.5 percent in early New York trading after reporting sales and profit that missed analysts’ estimates. Guess? Inc. dropped 6.5 percent in late trading after its revenue forecast trailed projections. Yahoo! Inc. (YHOO) added 1.6 percent as Oppenheimer & Co. upgraded the shares.
Standard & Poor’s 500 Index (SPX) futures expiring in June rose less than 0.1 percent to 1,549.2 at 7:16 a.m. in New York. Contracts on the Dow Jones Industrial Average increased 17 points, or 0.1 percent, to 14,425.
“Europe is in desperate need for growth, but today’s bad PMI numbers are signaling a worsening of growth prospects,” said Witold Bahrke, who helps oversee $55 billion as senior strategist at PFA Pension A/S in Copenhagen. “This, combined with increasing political risk, is normally a recipe for renewed euro stress.”
U.S. stocks rose yesterday, snapping a three-day decline in the S&P 500, as the Federal Reserve indicated it will keep up bond buying to stimulate the economy. The benchmark gauge has rallied 9.3 percent this year.
A purchasing managers’ index for Germany’s manufacturing industry unexpectedly fell to 48.9 this month from 50.3 in February, London-based Markit Economics said today. Readings below 50 indicate contraction, and economists in a Bloomberg survey had forecast 50.5.
European Economy
A composite index of euro-area services and manufacturing output fell to 46.5 in March from 47.9 last month, Markit said. Economists had forecast a reading of 48.2, according to the median of 23 estimates in a Bloomberg survey.
The European Central Bank said it may cut Cypriot banks off from emergency funds after March 25 as the island nation’s president, Nicos Anastasiades, scrambled to forge agreement on a plan to stave off financial collapse.
The ECB’s Governing Council said so-called emergency liquidity assistance “could only be considered” after Monday if an aid program from the euro area and International Monetary Fund“that would ensure the solvency of the concerned banks” is in place.
In the U.S., sales of previously owned homes probably rose in February to the highest level in more than three years, economists said before a report from the National Association of Realtors due at 10 a.m. New York time.
Home Sales
Purchases increased 1.6 percent to a 5 million annualized rate, the most since November 2009, according to the median forecast of 77 economists surveyed by Bloomberg. Other data may show an index of leading economic indicators advanced for a third straight month in February and initial claims for jobless benefits rose last week.
Oracle tumbled 7.5 percent to $33.10. The largest database- software supplier reported sales and profit that missed analysts’ estimates as corporate customers transitioning to Web- based programs bought less hardware and software.
Fiscal third-quarter profit excluding some items was 65 cents a share on adjusted sales of $8.97 billion, the company said in a statement late yesterday. That compared with analysts’ average projection for profit of 66 cents and revenue of $9.37 billion, according to data compiled by Bloomberg.
Guess slid 6.5 percent to $25.20 in extended New York trading yesterday. The maker of designer jeans forecast annual revenue of $2.6 billion to $2.64 billion, less than analysts’ estimates of $2.74 billion. The shares didn’t trade in Europe.
Yahoo, the largest U.S. web portal, rose 1.6 percent to $22.45 in early New York trading. The shares were upgraded to outperform, meaning investors should buy the shares, from market perform at Oppenheimer, which cited the value of Yahoo Japan shares and a possible initial public offering of Alibaba.com Ltd. in the next 12 months.
To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net
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