U.S. Stock-Index Futures Drop on Economic Data From Asia, Europe

Sept. 20 (Bloomberg) — U.S. stock-index futures declined as data from China to Japan and the euro area increased concern a global economic slowdown is worsening.

Adobe Systems Inc. fell in after-hours trading as the software maker forecast profit that missed analysts’ estimates. Norfolk Southern Corp. dropped 5.4 percent in Europe as the rail carrier’s outlook trailed projections. Bed Bath Beyond Inc. retreated 5.3 percent after reporting second-quarter profit below expectations. Nike Inc. rose 1 percent after the sporting- goods maker announced an $8 billion buyback.

Standard Poor’s 500 Index futures expiring in December lost 0.3 percent to 1,448.2 at 10:57 a.m. in London before reports on U.S. leading economic indicators and manufacturing. Contracts on the Dow Jones Industrial Average fell 40 points, or 0.3 percent, to 13,457.

“Poor economic data has superseded central-bank stimuli as the market’s near-term focus,” said Ioan Smith, a market strategist at Knight Equity Europe Ltd. in London. “The re- acceleration of a slowdown in Asia and Europe to new cycle lows will be a big worry for countries in the midst of sweeping austerity and a concern for investors betting the recent rally can last.”

U.S. stocks rose yesterday as the Bank of Japan increased its asset-purchase target and sales of existing American homes rose more than forecast. The SP 500 has advanced 16 percent in 2012 as central banks around the world stepped up their effort to sustain growth.

Chinese Manufacturing

A Chinese manufacturing survey pointed to an 11th month of contraction in September and Japan’s exports fell in August, supporting the case for increased stimulus as Asia’s growth slows.

The preliminary manufacturing reading for a China purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics was 47.8, compared with a final level of 47.6 last month. A reading above 50 indicates expansion. Japan’s overseas shipments slid 5.8 percent on weakness in demand from Europe and China.

Euro-area services and manufacturing output also contracted in September. A composite index based on a survey of purchasing managers in both industries in the 17-nation euro area dropped to 45.9, a 39-month low, from 46.3 in August, Markit said today in an initial estimate.

The Markit Economics preliminary index of U.S. manufacturing probably fell to 51.5 in September from 51.9 last month, economist forecasts compiled by Bloomberg show, indicating slowing growth.

Leading Indicators

The Conference Board’s gauge of leading economic indicators might have fallen 0.1 percent in August, after gaining 0.4 percent in July, a separate survey showed. The Federal Reserve Bank of Philadelphia’s economic index will probably be minus 4.5 for September, showing contraction for a fifth straight month, according to a Bloomberg survey of economists. Both reports are due at 10 a.m. New York time.

Trading of futures linked to the benchmark for U.S. options prices has risen to a record as investors seek to protect gains in stocks that are approaching all-time highs.

More than 190,000 futures on the Chicago Board Options Exchange Volatility Index changed hands on Sept. 13, the most since the contracts started in 2004, according to data compiled by Bloomberg. That brought the average daily volume to almost 152,000 last week, a record. The VIX fell 41 percent this year through yesterday, leaving the gauge near a five-year low.

Adobe, Norfolk

Adobe dropped 0.9 percent to $32.81 in late New York trading yesterday. The company’s forecast for fiscal fourth- quarter sales and profit lagged behind analyst estimates as it offered a lower-priced subscription version of its flagship Creative Suite software.

Norfolk Southern declined 5.4 percent to $68.77 in Germany. Third-quarter profit will miss analysts’ estimates as dwindling volumes at the second-biggest eastern U.S. railroad add to signs of a slowing domestic economy.

A drop in coal carloads and merchandise shipments will offset container-freight gains, paring revenue by about $120 million for the three months ending Sept. 30, the company said late yesterday. Fuel-surcharge receipts will decline by $80 million.

Norfolk Southern’s peers also retreated. Union Pacific Corp., the biggest U.S. railroad, fell 3.5 percent to $120.68 in Germany, while CSX Corp. dropped 4 percent to $21.87.

Bed Bath

Bed Bath Beyond, the operator of more than 1,000 home- furnishing stores, sank 5.3 percent to $65.16.

Net income fell 2.2 percent to $224.3 million from $229.4 million a year earlier, the Union, New Jersey-based company said late yesterday. Profit per share rose to 98 cents from 93 cents a year earlier after the number of shares outstanding declined. Analysts projected $1.02 a share, the average of 25 estimates compiled by Bloomberg.

Nike advanced 1 percent to $98.61 in Germany. The world’s largest maker of sporting goods announced an $8 billion, four- year program to repurchase Class B shares.

Liberty Global Inc. may be active. The John Malone-led cable-TV company offered to buy the remaining 49.6 percent of Belgium’s Telenet Group Holding NV for 1.96 billion euros ($2.54 billion), allowing it to forge closer links with his other cable-TV units in Europe. The shares didn’t trade in Europe.

–Editors: Andrew Rummer, Srinivasan Sivabalan

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

Article source: http://www.sfgate.com/business/bloomberg/article/U-S-Stock-Index-Futures-Drop-on-Economic-Data-3881524.php

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