U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will retreat for a third day, as investors weighed this week’s Federal Reserve stimulus announcements and data showing a rise in durable goods orders.
Sears Holdings Corp. sank 14% as the retailer controlled by billionaire hedge-fund manager Edward Lampert posted a loss. Gap Inc., the largest U.S. apparel chain, and Salesforce.com Inc., the biggest maker of online customer- management tools, dropped more than 2.1% as the companies’ profit forecasts trailed analysts’ estimates.
S&P 500 futures expiring in June lost 0.4% to 1,642.80 at 8:40 a.m. in New York. Futures pared declines as a report showed orders for U.S. durable goods increased more than forecast in April. Contracts on the Dow Jones Industrial Average fell 29 points, or 0.2%, to 15,260.
“The U.S. economy is undoubtedly the one that will paddle along, but anyone who is going for some kind of robust recovery is being irrationally optimistic,” Jonathan Compton, London- based managing director at Bedlam Asset Management, which oversees about $500 million, said by phone. “The debate on when monetary stimulus will be reduced is around five years too early. All they’ve been doing is essentially pumping air into an air bed full of holes.”
The S&P 500 is down 1% over the past four days, putting it on course for the first weekly slide in more than a month.
U.S. stocks retreated yesterday, giving benchmark gauges the first back-to-back drops in a month, as a contraction in China manufacturing offset American housing data and investors weighed comments from Fed Chairman Ben S. Bernanke, who said on May 22 that the pace of asset purchases could be cut “in the next few meetings” if economic conditions improve.
That was a departure from previous statements from Bernanke where he stressed that policy will remain “highly accommodative,” Kevin Logan, chief U.S. economist at HSBC Holdings Plc, wrote in a report to investors this week. The S&P 500 has surged 144% since March 2009 as the Fed pumped more than $2 trillion into markets to boost economic growth.
Equity futures pared losses as the Commerce Department said bookings for equipment meant to last at least three years increased 3.3% last month after dropping 5.9% in March. The median forecast from 78 economists surveyed by Bloomberg projected a 1.5% increase.
Sears sank 14% to $49.83. The retailer reported a first-quarter loss of $2.63 a share as revenue fell 8.8% to $8.45 billion.
Gap slid 2.1% to $40.50. While first-quarter profit rose to 71 cents a share, exceeding the 69-cent top end of its forecast, the company maintained its projection that earnings this year will be $2.52 to $2.60. Analysts estimated $2.72, on average. The San Francisco-based company’s stock gained 33% this year through yesterday’s close.
Abercrombie & Fitch Co. tumbled 11% to $48.25 after the clothing retailer cut its earnings outlook. The company said its full-year profit may be $3.15 to $3.25 a share, down from a previous estimate for $3.35 to $3.45.
Salesforce plunged 6.1% to $42.90. Profit excluding some items for the fiscal second quarter will be 11 cents to 12 cents a share, Salesforce said. That compared with analysts’ average estimate for profit of 12 cents, according to data compiled by Bloomberg.
Marvell Technology Group Ltd., which makes chips for computers and mobile phones, jumped 5.4% to $11.92 after its sales forecast topped predictions. The company said it expects to have second-quarter revenue ranging between $770 million and $810 million. Analysts had estimated sales of $763 million, according to Bloomberg data.
Procter & Gamble Co. rose 3.9% to $81.80. The world’s largest consumer products maker is replacing Chief Executive Officer Bob McDonald with his predecessor, A.G. Lafley, as it struggles to rekindle growth at home and abroad. McDonald will retire June 30 after 33 years at the company, P&G said.
Pandora Media Inc. rallied 12% to $19.25. The biggest online radio service reported mobile revenue surged and the company controlled costs. Mobile revenue almost doubled to $83.9 million. Total sales climbed 55% to $125.5 million, beating the $123.8 million average of analysts’ estimates.