Futures Slip Before Retail Sales; Banks Lower
Stock index futures indicated a lower opening for Wall Street Monday, as bank shares continued to struggle and investors looked for guidance on the strength of the economy from retail sales numbers.
Intel's positive statement on orders and billings for the second quarter, which came after the bell Tuesday, trumped the European Union Commission slapping a record $1.45 billion fine on the company for anti-competitive practices. The company's shares rose about 1 percent in premarket trading though they were their morning highs.
Rival Advanced Micro Devices gained more than 4 percent in Germany as the censure of Intel reversed overnight after-hours losses that came after the company reported a quarterly loss on sharply-lower sales.
Also in corporate news, Ford Motor said late Tuesday it raised $1.4 billion through its 300-million share offer for $4.75 a share, according to Reuters. The company's shares continued to struggle, though, with Ford losing 4 percent premarket.
But some of the largest banks continued to struggle as the industry adapts to findings from the government stress tests.
HSBC shed 6 percent while Bank of America fell 1.8 percent premarket and JPMorgan Chase was off 1.2 percent. HSBC officials said Monday they felt the company could deliver a return on equity of 15 to 19 percent.
The dollar fell to four-month lows versus the euro, coming under pressure due to an opinion article in the Financial Times that touched on the risk of the U.S. losing its triple-A credit rating, refocusing attention on rising U.S. debt issuance.
The Treasury Department is due to make $21 billion in coupon payments on Friday as part of flows tied to its quarterly refunding moves. Another $52 billion of coupon securities are due to mature, for a total cash outflow of $73 billion, according to Reuters.
Retail sales data is out at 8:30 am New York time, and is expected to remain unchanged from a 1.2 percent fall in March, a Reuters poll of economists showed. Excluding automobiles, sales are seen up 0.2 percent companies with a 0.9 percent slide the previous month.
Oil prices continued to edge higher with weekly inventory data due out later in the morning.
In the day's first economic news, mortgage applications showed a drop last week even as lending rates continued to fall. The demand for refinancing fell even as new purchase applications actually rose slightly.
Retailer Macy's first-quarter earnings are out before the bell and March business inventories are out on Wednesday at 10 am New York time.
Also at 10 am New York time, American International Group Chief Executive Edward Liddy will testify before Congress on the collapse and rescue of the ailing insurance giant.
The Obama administration is contemplating a major overhaul of the compensation practices in the financial services industry, moving beyond banks to include loosely regulated hedge funds and private equity groups, the New York Times reported.
The banking and financial sectors were under strain on Wednesday after a range of European financials reported large declines in their first-quarter profits. The Dow Jones Stoxx banks index was 3.2 percent lower.
Treasury Secretary Timothy Geithner will speak at the Independent Community Bankers of America in Washington at 9 am New York time. And Federal Reserve Governor Elizabeth Duke will talk about banks role in the financial market in Jekyll Island, Ga., at 10:30 am.