Stocks fall as traders skittish ahead of busy week of economic, earnings reportsBy Stephen Bernard, AP
Monday, October 4, 2010
Stocks pull back to begin week
NEW YORK — Stocks are retreating to kick off a busy week of economic reports and earnings that culminates with the government’s monthly report on employment.
Traders are skittish Monday ahead of readings on August factory orders and pending home sales. A pullback in European stocks is also contributing to the decline.
Factory orders likely fell, while pending home sales grew, but remain at very low levels.
With no broad moves being made, traders are focusing on individual companies. Sanofi-Aventis has launched a hostile takeover offer for Genzyme.
The Dow Jones industrial average is down 11, or 0.1 percent, at 10,819. The S&P 500 is down 2, or 0.2 percent, at 1,144, while the Nasdaq composite is down 8, or 0.4 percent, at 2,362.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — Stock futures retreated to kick off a busy week that culminates with the government’s monthly report on employment.
Traders were skittish Monday ahead of readings on August factory orders and pending home sales. A pullback in European stocks was also contributing to the decline in futures.
Factory orders likely fell 0.4 percent in August according to economists polled by Thomson Reuters. The drop, due largely to plummeting aircraft orders, would reverse gains seen in July. Excluding the volatile aircraft sector, orders likely rose 3 percent, which is a steep retreat from the 5.2 percent growth seen in July.
Meanwhile, the number of buyers that signed contracts to purchase homes in August likely crept higher, but remains at very weak levels. Economists predict the National Association of Realtors pending home sales index rose to 81.4 in August from 79.4 in July.
The week’s blitz of economic reports and the start of earnings season will provide traders with strong insight into the strength of the economy as the fourth quarter begins. With unemployment still very high, traders will be most closely be watching Friday’s monthly jobs report. Investors worry that the economy will continue to muddle along very slowly until unemployment drops and private employers start to strong ramp up hiring.
Ahead of the opening bell, Dow Jones industrial average futures fell 32, or 0.3 percent, to 10,736. Standard & Poor’s 500 index futures fell 4.40, or 0.4 percent, to 1,137.90, while Nasdaq 100 index futures fell 8.25, or 0.4 percent, to 1,986.25.
With stock futures falling, traders moved money into safer alternatives. Bond prices rose, sending interest rates lower. The yield on the 10-year Treasury note, which is often used as a benchmark to set interest rates on loans, fell to 2.49 percent from 2.51 percent late Friday.
In corporate news, France’s Sanofi-Aventis launched an $18.5 billion hostile takeover offer for Genzyme Corp. Sanofi-Aventis’ previous offer was rejected by Genzyme’s board, so it is now taking the offer directly to shareholders.
The offer, at $69 per share, is unchanged from Sanofi-Aventis’ original offer in July.
Shares of Genzyme rose 22 cents to $71.10 in pre-opening trading. Sanofi-Aventis shares fell 13 cents to $32.99.
Swiss regulators said Monday they will require the country’s two biggest banks, Credit Suisse Group and UBS AG, to hold more money in reserve than the amount required under newly agreed upon international standards.
Credit Suisse shares rose 5 cents to $43.29, while UBS rose 1 cent to $17.13.
Overseas, Britain’s FTSE 100 fell 0.2 percent, Germany’s DAX index fell 1 percent, and France’s CAC-40 fell 1 percent. Japan’s Nikkei stock average fell 0.3 percent.
Tags: Manufacturing Sector Performance, New York, North America, United States