By Anora Mahmudova and Carla Mozee, MarketWatch Halliburton
buying Baker Hughes in $35 billion deal
NEW YORK (MarketWatch) -- U.S. stock futures declined Monday
after manufacturing data from New York state came in slightly below
forecasts.
Futures were already weaker after news that Japan -- the world's
third-largest economy -- fell into recession, but shares of Baker
Hughes Inc. look set to shine after the oil-services company agreed
to a buyout.
Futures for the Dow Jones Industrial Average (DJZ4) dropped 35
points, or 0.2%, to 17,569, and those for the S&P 500 index
(SPZ4) lost 5 points, or 0.3%, to 2,032.90. Nasdaq 100 futures
(NDZ4) declined 8.5 points, or 0.2%, to 4,232.90.
Economic data: The Empire State manufacturing index, the first
of the many regional manufacturing gauges to be released, rebounded
a bit November, but is still well below September levels,
indicating a downshift in activity.
Next on Monday's docket, is the release of October industrial
production figures at 9:15 a.m. Eastern.
Weakness in futures set in after official data showed Japan's
real gross domestic product shrank 1.6% in the third quarter,
weighed by companies cutting inventories and subdued capital
investment. Economists surveyed by The Wall Street Journal had on
average been looking for the economy to expand by 2.25%.
Japanese stocks sank after the report, leaving the Nikkei Stock
Average down 3%. The Japanese yen, meanwhile, slid to a seven-year
low against the U.S. dollar (USDJPY), but recovered somewhat
allowing the dollar buy more than Yen116. The country's Prime
Minister Shinzo Abe said he will decide on whether to move forward
with a planned sales-tax increase following analysis of the
situation, according to media reports Monday. Abe may also call for
a snap election to be held next month.
"The stock market and currency could remain volatile until Mr.
Abe confirms his intentions. There is, of course, the prospect of
further economic stimulus as well," said Richard Troue, head of
investment analysis, at Hargreaves Lansdown, in a Monday note.
A pullback on Wall Street would follow a largely muted end to
trading on Friday, when the S&P 500 (SPX) edged up 1 point and
the Dow industrials (DJI) slipped 0.1%. The Nasdaq Composite (RIXF)
rose 0.2%. The indexes last week marked a fourth week of gains.
Stocks to watch:Baker Hughes Inc.(BHI) shares bounced up 16%
after Halliburton Co.(HAL)agreed to purchase its rival oil-services
provider in a cash-and-stock deal valued at $34.6 billion. The deal
is expected to close in the second half of 2015. Halliburton shares
fell nearly 5%.
Pfizer Inc. (PFE) shares fell 1.6% ahead of the open after the
drug maker and Germany's Merck KGaA said they'll work together to
develop a new anti-cancer tumor treatment. Pfizer cut its 2014
per-share earnings view as Merck will receive $850 million upfront
in the venture.
Tyson Foods Inc. (TSN) shares climbed 3.8% before the bell as
the meat producer said quarterly sales rose 14%.
Botox maker Allergan Inc. (AGN) neared a deal to be acquired by
Actavis PLC(ACT), according to The Wall Street Journal. The WSJ
said the deal will likely be at a premium to Activis's $59 billion
market capitalization, with media reports suggesting it could be
worth up to $65 billion. That would fend off Allergan's months-long
attempt to thwart a hostile $53 billion bid by Valeant
Pharmaceuticals International (VRX).
Hasbro Inc.(HAS) shares picked up 2.8% in light volume
premarket. Over the weekend, merger talks between the Transformers
toymaker and DreamWorks Animation SKG Inc. (DWA) fell through,
according to reports.
Other markets: December crude-oil futures (CLZ4) fell 1%,
resuming a run of losses. European stocks were off session lows and
nearly flat. Gold futures (GCX4) were higher at around $1,186 an
ounce.
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