ECONOMIC INDICATORS

U.S. stock futures are little changed before jobs report

BLOOMBERG FILE PHOTO/JIN LEE
STOCK FUTURES WERE little changed on the S&P 500 Index before the U.S. unemployment report for December.
Posted 1/4/13

LONDON - U.S. stock futures were little changed, with the Standard & Poor’s 500 Index heading for its biggest weekly rally in 13 months, as investors awaited the non- farm payrolls and unemployment report for December.

Citigroup Inc. and PerkinElmer Inc. advanced in early New York trading after brokerages recommended that investors buy their shares. Coinstar Inc. slid 3.3 percent in late trading yesterday after announcing that Chief Executive Officer Paul Davis will retire.

S&P 500 futures expiring in March added 0.1 percent to 1,454.5 at 7:22 a.m. in New York. The equity benchmark surged 13 percent in 2012, its biggest annual rally in three years, as the Federal Reserve expanded asset purchases and the European Central Bank announced an unlimited bond-buying plan. Dow Jones Industrial Average futures declined 1 point, or less than 0.1 percent, to 13,318 today.

The S&P 500 has risen 4.1 percent this week, its largest advance since Dec. 2, 2011. The gauge soared 2.5 percent on Jan. 2 after Republicans and Democrats agreed on a compromise budget that avoided the so-called fiscal cliff of sweeping tax increases and spending cuts.

“The jobs data are key,” said Francois Savary, chief investment officer of Rey Asset Management SA in Geneva, which oversees $7.85 billion. “I believe the macro picture is improving. After the fiscal-cliff deal, you have signs that the U.S. economy is going to be slower, but with no recession looming. There could be some volatility in the market in the next few weeks.”

Jobs report

Employers probably added more workers in December than in November, economists said before the Labor Department report at 8:30 a.m. in Washington. Payrolls rose by 153,000 workers, according to the median forecast of 79 economists surveyed by Bloomberg News. They climbed by 146,000 the previous month. The unemployment rate probably held at 7.7 percent, its lowest since December 2008.

A separate release from the Institute for Supply Management at 10 a.m. will show its services index, which covers almost 90 percent of the economy, eased to 54 in December from 54.7 in November, according to the median estimate. A reading above 50 means that activity increased.

RBC Dominion Securities Inc. raised its stance on U.S. equities in a report today, recommending that investors hold more of the securities than are represented in benchmarks.

“Regardless of what one might think about Washington’s last-minute fiscal deal, it seems to have removed a layer of uncertainty and this is positive for share prices,” analysts led by Myles Zyblock wrote in the note.

Citigroup advances

Citigroup gained 0.4 percent to $41.54 as Goldman Sachs Inc. added the lender to its conviction-buy list. New Chief Executive Officer Michael Corbat may lead Citigroup to better returns and increased efficiency, according to Goldman analysts.

PerkinElmer advanced 0.9 percent to $32.30 after Morgan Stanley raised the shares to overweight from equal weight. The brokerage said the diagnostic and research company has a better revenue and earnings outlook than its peers.

Johnson & Johnson added 0.5 percent to $71.11 after people familiar with the situation said the company has shown interest in Warburg Pincus LLC’s contact-lens manufacturer Bausch & Lomb Inc. Warburg wants at least $10 billion for the business, the people said.

Mosaic Co. declined 1.4 percent to $56 after predicting that its gross margin for potash will drop in the third quarter from the second quarter.

Coinstar retreated 3.3 percent to $50.34 in late trading yesterday after saying Davis will retire on March 31. The owner of the Redbox movie-rental kiosks said Chief Financial Officer J. Scott Di Valerio will take over.

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