Futures Fall; Bernanke Comments Weighed
U.S. stock index futures pointed to a lower open Monday as investors pulled back from strong gains in the previous week and weighed up the impact of Federal Reserve Chairman Ben Bernanke's willingness to launch further quantitative easing.
Shares made strong gains in the previous week despite a weaker-than-expected nonfarm payrolls report on Friday, but low volume and uncertainty over the latest Bernanke comments saw futures struggling.
On Sunday Bernanke said during an interview with “60 Minutes” that another round of quantitative easing could be launched if the unemployment situation doesn't improve. But he also said it could be four to five years before the U.S. returns to unemployment of between 5 and 6 percent from the current 9.8 percent.
The signals from Bernanke would usually have boosted sentiment, but that isn't happening, Andrew Sykes, equity trader at Spreadex, told CNBC.com.
"There doesn't seem to be a huge amount of volume; (investors) are probably waiting for leadership when U.S. gets in," Sykes said.
Concerns over the euro zone debt crisis also continued to drag on sentiment. European shares were mixed as euro zone ministers came under pressure to increase the size of a 750 billion euro ($1,006 billion) bailout fund. The fund is intended to be used to prevent contagion of the debt crisis as and when is necessary.
Moody's Investors Service, meanwhile, downgraded Hungary's soverign debtto near junk level, citing increased concerns with Hungary's fiscal sustainability and high levels of external debt.
Asian stocks ended mixed with the Nikkei 225 and Hang Seng seeing slight declines.
The dollar rose against a basket of currenciesas the euro fell. Gold continued to riseMonday on prospects of continued Fed easing and euro zone worries, as did silver, which was trading at a 30-year high.
Shares of Bank of America slipped ahead of the open after the Wall Street bank told US regulators it has sold enough assets to meet the conditions set down in its $45 billion government bailout. BofA was given until the end of the year to generate the funds.
And the world's largest drugmaker, Pfizer , will welcome its new CEO Ian Read who will replace the outgoing Jeffrey Kindler, who retired unexpectedly, saying he needed to "recharge his batteries."
And Kellogg announced CEO David Mackay will retireeffective Jan. 1, and will be replaced by John Bryant, currently chief operating officer.
In the technology sector, AOL could be on the brink of a series of transactions to breakup the Internet content provider, which could culminate in a merger with Yahoo , Reuters reported citing sources.
Sprint Nextel shares spiked after David Einhorn of Greenlight Capital, a hedge fund, said he had taken a long position in the stock. Einhorn also said Greenlight has a long position in Vodafone .
Groupon, meanwhile, spurned Google's officer to buy the online, local coupon site, preferring to stay independent. Google was reportedly willing to pay up to $6 billion for Groupon, which has 35 million subscribers.
Elsewhere in M&A news, 3M plans to buy Winterthur Technologies AGof Switzerland for about $448 million, to give the diversified technology company a bigger presence in industrial grinding and finishing solutions.
In health care, AstraZeneca's new heart medicine Brilique — or Brilinta — won final clearance from regulators in the European Union. The medicine will compete against Plavix, the world's second biggest-selling drug, as early as next year.
On Tap Next Week:
MONDAY: Employment trends index, Richmond Federal Reserve President Lacker speaks, UN Climate Conference, MetLife shareholder meeting; before-the-bell earnings from Dollar General.
TUESDAY: Bank of Canada announcement, IBD/TIPP economic optimism index, three-year Treasury note auction, consumer credit, API weekly report, Ireland budget announcement, 3M investor meeting; before-the-bell earnings from AutoZone, BMO Financial and Vail Resorts; after-the-bell earnings from H&R Block and Novellus.
WEDNESDAY: McDonald's November sales, MBA mortgage applications, quarterly services survey, 10-year Treasury note auction; before-the-bell earnings from United Natural Foods.
THURSDAY: BOE announcement, jobless claims, wholesale inventories, 30-year Treasury bond auction, DuPont investor day; before-the-bell earnings from Costco and Lululemon Athletica; after-the-bell earnings from National Semi.
FRIDAY: International trade, import and export prices, consumer sentiment, and Treasury budget.
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