U.S. stock futures were little changed, after the Standard & Poor’s 500 Index rallied to the highest level since August, as an increase in housing starts offset earnings from Apple Inc. (AAPL) that missed estimates.
Apple, the world’s largest technology company, tumbled 5.2 percent as customers put off purchases of iPhones before the release of the latest version. Intel Corp. (INTC) gained 3.6 percent after the world’s largest chipmaker forecast sales that exceeded some analysts’ estimates. Yahoo! Inc. increased 3.6 percent after demand for advertising helped profit top forecasts.
S&P 500 futures expiring in December declined 0.1 percent to 1,221.60 at 9:15 a.m. New York time, after falling as much as 0.7 percent earlier. The index added 2 percent yesterday. Dow Jones Industrial Average futures were unchanged at 11,526.
“The U.S. housing data is helpful,” Peter Jankovskis, who helps manage about $2.4 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “That is one big hurdle that the economy needs to overcome. Apple’s figures are not too big of a shock and other tech names surprised on the upside. It’s shaping up to be a very good earnings season.”
The S&P 500 rose from the threshold of a bear market early this month amid optimism over corporate earnings and steps by European leaders to support banks. The rebound brought the gauge close to the top of a price range between 1,074.77 and 1,230.71, where it’s traded for more than two months. The S&P 500 briefly climbed above that range yesterday, reaching 1,233.10.
Earnings Season
Profit for S&P 500 companies will climb 17 percent in the third quarter and rise 18 percent to a record $99.76 for all of 2011, according to analyst estimates compiled by Bloomberg yesterday. About three quarters of the S&P 500 companies which reported results since Oct. 11 beat analysts’ estimates.
U.S. stock futures pared losses before the start of regular trading as a Commerce Department report showed that builders began work on more U.S. homes than forecast in September on rising demand for apartments and condominiums as more Americans become renters. The cost of living in the U.S. rose in September at the slowest pace in three months, signaling inflation may moderate as Federal Reserve officials have predicted.
James Bullard, president of the Federal Reserve Bank of St. Louis, said current central bank policy is “appropriately easy” and another recession is unlikely.
“We probably avoided this recession scare that we’ve been having since August,” Bullard said today in a radio interview in St. Louis on “Bloomberg Surveillance” with Tom Keene. Recent economic reports have “surprised on the upside,” he said.
‘Intense’ Talks
German Chancellor Angela Merkel is in “intense” talks with all partners on a debt-crisis solution for a European Union summit on Oct. 23, deputy government spokesman Georg Streiter said. German Finance Minister Wolfgang Schaeuble hasn’t specified how much additional firepower the European bailout fund may have, ministry spokesman Martin Kotthaus told reporters today in Berlin. Spain’s credit rating was cut for the third time in 13 months by Moody’s Investors Service yesterday as Europe’s debt crisis threatens to engulf the nation.
“Time is running out for Europe,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said. His firm oversees $550 billion. “The longer it waits to fix itself the more uncertainty there is. We set the top of the range on the S&P 500. It would take a lot of good news to get through 1,230.”
Apple tumbled 5.2 percent to $400.39 after it missed analyst estimates for the first time in at least six years. The company sold 17.07 million iPhones, less than the 20 million projected by analysts surveyed by Bloomberg, as consumers held out for the iPhone 4S, released after the close of the period that ended Sept. 24.
Intel Rallies
Intel gained 3.6 percent to $24.25. The chipmaker said sales of notebook computers are driving earnings, with unit growth at a percentage in the double digits. The outlook defied analysts’ predictions that consumers are turning away from laptops in favor of tablets and smartphones. Intel also may have benefited from a failure by rival Advanced Micro Devices Inc. to supply enough of its own new chips.
Yahoo added 3.6 percent to $16.02. The U.S. Web portal that is exploring strategic options benefited in the recent period from growing demand for online ads, even after firing Chief Executive Officer Carol Bartz and beginning a review of its strategy. The board is exploring a “full range” of options for the company, interim CEO Tim Morse said on a call with analysts yesterday.
Abbott Laboratories (ABT) jumped 6.8 percent to $55.98. The maker of nutritional drinks, heart stents and prescription drugs plans to split into two, with one company focusing on medical products and the other on research-based medicines.
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