U.S. stock futures fell, after the Standard & Poor’s 500 Index approached a record high yesterday, as German manufacturing unexpectedly contracted and Cyprus’s president worked on a new plan to obtain a European bailout.
Oracle Corp. plunged 7.6% after reporting sales and profit that missed analysts’ estimates. Hewlett-Packard Co. fell 1% after lifting its quarterly dividend. Guess? Inc. dropped 6% after its revenue forecast trailed projections. Yahoo! Inc. added 1.7% as Oppenheimer & Co. upgraded the shares.
Standard & Poor’s 500 Index futures expiring in June fell 0.2% to 1,546 at 9:15 a.m. in New York. The benchmark index is trading within seven points of its record reached in 2007. Contracts on the Dow Jones Industrial Average lost 10 points, or 0.1%, to 14,398 today.
The market “is quite entitled to a breather and I think it may be taking a breather right now,” David Kelly, the New York- based chief global strategist at JPMorgan Funds, said in a phone interview. “The U.S. economic story continues to improve,” he said. “We still have some European concerns because the Europeans have to figure out a solution for Cyprus.”
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% this year.
A purchasing managers’ index for Germany’s manufacturing industry unexpectedly fell this month while a measure of euro- area services and manufacturing output contracted more than forecast, London-based Markit Economics said.
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.
In the U.S., applications for jobless benefits increased by 2,000 to 336,000 in the week ended March 16, Labor Department figures showed. Sales of previously owned homes probably rose in February to a 5 million annualized rate, 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. Other data may show an index of leading economic indicators advanced for a third straight month in February.
The S&P 500 is approaching a record almost 5 1/2 years after peaking and two years after most stocks in the gauge fully recovered from the worst bear market since the 1930s.
The index has climbed 130% since March 2009, adding $10 trillion to the value of American equity as it erased losses from the credit crisis. The majority of companies surpassed their previous highs by April 2011, according to data compiled by Bloomberg. The S&P 500 Equal Weighted Index, which counts each company in the index equally instead of by their market value, increased 192% from the bottom.
Unlike past bull markets, where a single industry dominated, all groups have improved in this rally as the U.S. economy recovers. The breadth of the rebound can be seen in the S&P 500’s weightings, where none of the 10 industry measures represents more than 18% of the index. In 2000, technology companies made up 35% of the gauge, and in 2006, financial stocks accounted for 22%.
“The breadth of this rally is rather remarkable,” Stephen Wood, who helps manage about $152 billion as the New York-based chief market strategist for North America at Russell Investments, said by telephone. “It speaks to the fact that four years ago the markets were pricing in the end of the world, but the end of the world was not nigh. So we’ve seen this significant but drawn-out recovery across the board in equities -- small, medium, large, defensive, dynamic, value, growth.”
Oracle tumbled 7.6% to $33.05 today. 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.
Hewlett-Packard slid 1% to $22.70. The world’s largest personal computer maker boosted its quarterly dividend by 10% to 14.52 cents, topping the average analyst estimate of 14 cents.
The payout increase comes a day after Chairman Ray Lane and two other board members were re-elected in slim majorities in a referendum that demonstrates growing dismay over the company’s performance and acquisition of Autonomy Corp.
Guess slid 6% to $25.33. The maker of designer jeans forecast annual revenue of $2.6 billion to $2.64 billion, less than analysts’ estimates of $2.74 billion.
Yahoo, the largest U.S. web portal, rose 1.7% to $22.47. 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.