U.S. Stock Futures Fall After S&P 500 Climbs to Record

By Sarah Jones & Inyoung Hwang

U.S. stock futures fell, after the Standard & Poor’s 500 Index (SPX) climbed to five successive records, even as data showed jobless claims declined.

Apache Corp. jumped 1.6 percent after saying it will divest $4 billion in assets and buy back shares. Green Mountain Coffee Roasters Inc. added 15 percent after raising its profit forecast. Activision Blizzard Inc. dropped 6.7 percent after the largest video-game maker in the U.S. said it remained cautious for the second half. Rackspace Hosting Inc. plunged 20 percent after posting earnings and sales that missed projections. S&P 500 futures expiring in June retreated 0.2 percent to 1,625.80 at 8:56 a.m. in New York after the benchmark measure set a record level yesterday for a fifth consecutive trading day. Contracts on the Dow Jones Industrial Average dropped 18 points, or 0.1 percent, to 15,044 today.

“The risk of a melt-up in stocks is high and rising,” Michael Hartnett, chief investment strategist at Bank of America Corp., wrote in a report to clients titled ‘Raging Bull’ today. “Positioning, price action, policy and a range-bound economy can conspire to cause an overshoot.

Applications for unemployment insurance payments decreased by 4,000 to 323,000 in the week ended May 4, the least since January 2008, Labor Department figures showed today. Economists forecast 335,000 claims, according to the median estimate in a Bloomberg survey. The average over the past month was the lowest since before the last recession began.

Bull Market

U.S. stocks rallied yesterday, as companies forecast earnings that beat analysts’ estimates. The S&P 500 has surged 14 percent so far this year amid optimism central banks will continue to use stimulus to support economic growth. The equity benchmark has entered the fifth year of a bull market, fueled by three rounds of bond purchases from the Federal Reserve.

Fed Bank of Philadelphia President Charles Plosser said it is ‘‘disturbing’’ to him that ‘‘more and more is being expected of central banks.’’

‘‘We are expected to solve all the world’s problems,’’ Plosser said in an interview on Bloomberg television today. ‘‘Our fiscal authorities are not doing a very good job in any country.’’

In Europe, the Bank of England’s Monetary Policy Committee today left its bond-purchase program unchanged at 375 billion pounds ($584 billion), in line with all but one of 44 economistssurveyed by Bloomberg News. The bank also kept its key interest rate at a record low of 0.5 percent.

The Bank of Korea cut its interest rates today. Governor Kim Choong Soo and his board lowered their benchmark seven-day repurchase rate to 2.5 percent from 2.75 percent.

Earnings Scorecard

About 72 percent of the S&P 500 companies that have released results since the start of the earnings season have exceeded profit projections, while 52 percent have missed sales estimates, data compiled by Bloomberg show. Dean Foods Co. and Priceline.com Inc. are among 10 S&P 500 companies reporting earnings today.

Apache climbed 1.6 percent to $79. The oil and natural gas producer plans to sell $4 billion in assets. The Houston-based company will use the initial proceeds of $2 billion toward paying down debt, according to a statement today. The remaining proceeds will be used to buy back shares under a program the Board authorized to repurchase as many as 30 million shares, according to the statement.

Green Mountain Coffee Roasters Inc. rallied 15 percent to $68.32. The maker of Keurig single-serve brewers raised its profit forecast on higher K-Cup sales and announcing an expanded partnership with Starbucks Corp.

News Corp. (NWSA)

News Corp. advanced 3.2 percent to $33. The Rupert Murdoch-led media company tripled net income to $2.85 billion in its third quarter. Profit excluding some items of 36 cents a share beat the 35-cent average of analyst estimates compiled by Bloomberg.

Groupon Inc. (GRPN) surged 13 percent to $6.29. The daily-deals website posted first-quarter revenue of $601.4 million, exceeding estimates as sales through its mobile applications increased. Analysts had projected $591 million. The company’s net loss narrowed to $3.99 million, or 1 cent a share, from $11.7 million, or 2 cents, a year earlier. Analysts had predicted a loss of 2 cents.

Activision dropped 5.6 percent to $14.23 as Chief Executive Officer Bobby Kotick said ‘‘the risks and uncertainties in the back half of 2013 are more challenging than our earlier view, especially in the holiday quarter.” The publisher of “Call of Duty” reported first-quarter profit excluding some items of 17 cents a share, beating analysts’ estimates.

Rackspace tumbled 20 percent to $41.65. The provider of Web-based computing posted first-quarter earnings and sales that missed projections. At least four analysts cut their ratings on the stock, including Evercore Partners Inc., which dropped the San Antonio, Texas-based company to equal-weight from overweight, and Credit Agricole SA, which lowered the stock to sell from underperform.

To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net

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