US STOCKS-Futures drop on global economy concerns, merger doubt
15/10/2014 13:24
* Bank of America gains in premarket after results
* Shire shares tumble as AbbVie reconsiders bid
* PPI, Retail sales data due
* Futures off: Dow 111 pts, S&P 16.5 pts, Nasdaq 29 pts
(Updates prices, adds premarket movers)
By Chuck Mikolajczak
NEW YORK, Oct 15 (Reuters) - U.S. stock index futures
dropped on Wednesday as selling resumed on worries over the
health of the world economy, ahead of a slew of data and
corporate earnings.
The benchmark S&P 500 had eked a tiny gain at the close a
day earlier following three sessions of declines spurred by
concern over the potential spread of Ebola, the impact of global
economic weakness on U.S. earnings and plunging oil prices.
The S&P .SPX has lost 6.6 percent since its Sept. 18
record closing high and is now up just 1.6 percent for the year,
while the Dow .DJI is down 1.6 percent since Dec. 31.
Futures were little changed earlier in the day before
dropping steeply in heavy trading, reflecting a recent jump in
volatility in the equity markets.
Aside from concerns about the global economy, Chicago-based
AbbVie ABBV.N said it was reconsidering its $55 billion
takeover of the company weeks after the U.S. government moved to
curb deals designed to reduce tax, throwing the vitality of
merger and acquisition activity into doubt.
U.S.-listed shares of Shire SHPG.O tumbled 25.9 percent to
$182.24 before the opening bell while AbbVie shares declined 4.1
percent to $51.90. ID:nL6N0SA0O5
"This is the bottom line, the market is technically broken,
expect this volatility because technically it needs to build a
base again, so any news that would not necessarily have affected
it as much will now affect it more - it's amplified," said Ken
Polcari, director of the NYSE floor division at O'Neil
Securities in New York.
At 8:30 a.m. EDT (1230 GMT), investors will digest a trio of
economic reports, including the Empire State Manufacturing
Survey for October, as well as retail sales and the producer
price index for September.
Investors will also look to the latest earnings reports for
signs of growth. Bank of America shares BAC.N were up 0.7
percent to $16.64 in premarket after posting its third-quarter
results. ID:nASB08YSJ
Later in the session at 10:00 a.m. (1400 GMT), business
inventories for August are due, while the Federal Reserve's
Beige Book on business activity across the nation is expected at
2:00 p.m.
S&P 500 companies are expected to show earnings growth of
6.4 percent in the third quarter, according to Thomson Reuters
data, with revenue growth expected at 4 percent.
Ebola-related stocks were the most active in premarket
trading, after the Texas Department of State Health Services
said a second healthcare worker, who had treated the first
patient to be diagnosed with Ebola in the United States, has
tested positive for the disease. ID:nL2N0SA0EY
Lakeland Industries LAKE.O , a maker of garments to guard
against hazardous materials, jumped 16.1 percent to $24.88
before the opening bell. Alpha Pro Tech APT.A , a maker of face
masks, was up 21.1 percent to $8.91 in premarket, after
rocketing 129 percent last week. Versar Inc VSR.A , a project
management company that has a hazardous waste segment jumped
15.5 percent to $4.85.
* S&P 500 e-minis ESc1 were down 16.5 points, or 0.88
percent, with 352,583 contracts changing hands.
* Nasdaq 100 e-minis NQc1 were down 29 points, or 0.76
percent, in volume of 50,221 contracts.
* Dow e-minis 1YMc1 were down 111 points, or 0.68 percent,
with 54,600 contracts changing hands.
(Editing by Bernadette Baum)
((charles.mikolajczak@thomsonreuters.com; @ChuckMik; +1 646 223
5234; Reuters Messaging:
charles.mikolajczak.thomsonreuters.com@reuters.net))