U.S. Stock Futures Fall on Microsoft, American Express, Amazon
Published: Friday, 24 Jul 2009 - Bloomberg
http://www.bloomberg.com/apps/news?pid=20601103&sid=aPlycL0a_BH4
July 24 (Bloomberg) -- U.S. stock futures fell, indicating the Standard &
Poor’s 500 Index will slump after climbing to an eight-month high, as Microsoft
Corp., American Express Co. and Amazon.com Inc. posted disappointing quarterly
results.
Microsoft retreated 6.9 percent on lower profit and sales than analysts
estimated. American Express slipped 5 percent after saying earnings decreased
as the recession made it harder for cardholders to keep up with payments.
Amazon.com lost 6.6 percent following price cuts that caused the online
retailer’s revenue to miss projections.
S&P 500 futures expiring in September declined 0.4 percent to 965.20 at 9 a.m.
in Tokyo. Dow Jones Industrial Average futures dropped 29 points, or 0.3
percent, to 8,962. U.S. stocks surged yesterday, sending the Dow above 9,000
for the first time since January, as EBay Inc., Ford Motor Co. and AT&T Inc.
beat estimates and home resales increased more than forecast.
“At these levels in the market, there’s not a lot of room for error,” said Mark
Freeman, who helps manage $7.5 billion at Westwood Management Corp. in Dallas.
“Anything that deviates brings about a reevaluation by the market.”
Yesterday, the S&P 500 climbed to the highest level since President Barack
Obama was elected on Nov. 4, advancing 2.3 percent to 976.29. The Dow gained
188.03 points, or 2.1 percent, to 9,069.29, the highest since one session after
Election Day. The Nasdaq Composite Index surged 2.5 percent to 1,973.60 for a
12th straight gain, its longest winning streak since 1992.
Record Pace
Microsoft, American Express and Amazon.com’s worse-than- estimated results
followed two weeks of earnings reports that exceeded projections. Among S&P 500
companies that have posted second-quarter results, 74.1 percent beat the
average analyst forecast, according to data compiled by Bloomberg. That would
be the highest full-quarter figure on record, Bloomberg data going back to 1993
show. Three-hundred three S&P 500 companies have yet to report for the period.
Microsoft fell 6.9 percent to $23.80 in late trading in New York. The biggest
software maker reported a 29 percent drop in fiscal fourth-quarter earnings and
posted sales that missed analysts’ estimates, a sign that demand for Windows
and Office software is still declining. Per-share profit excluding some items
was 36 cents, missing the average forecast by 2.4 percent.
American Express retreated 5 percent to $27.99. The credit- card issuer
reported second-quarter sales of $6.09 billion, or 1.4 percent less than
analysts projected. Net income from continuing operations decreased 48 percent
to $342 million.
Free Shipping
Amazon.com lost 6.6 percent to $87.66. The world’s largest Internet retailer
has sought to ward off competitors by cutting prices and adding products, such
as low-cost laptops and outdoor equipment. Its low prices and free-shipping
offers have started to eat into profit, said Aaron Kessler, an analyst at
Kaufman Brothers LP. Sales of $4.65 billion were 1 percent less than analysts
estimated on average.
EBay rallied 11 percent yesterday as its earnings signaled consumers’ appetite
for online commerce is starting to recover. Ford jumped 9.4 percent after
topping analyst estimates by paring expenses and adding market share. AT&T
added 2.6 percent as new customers of Apple Inc.’s iPhone bolstered profit.
D.R. Horton Inc. led all 13 stocks in an index of homebuilders higher as sales
of existing homes increased for a third straight month. Before yesterday, the
Dow last exceeded 9,000 on Jan. 6.
“With the round number of 9,000 not being there for a significant amount of
time, it’s encouraging,” Michael Koskuba, who helps oversee $44 billion at
Victory Capital Management Inc. in New York, said of yesterday’s rally. “It’s
really a result of companies reporting better-than-expected news. That’s
encouraging given that we are in a difficult economic environment"
