U.S. stock-index futures decline amid talks on budget, Greek aid

STOCK FUTURES FALL after the S&P 500's largest weekly gain since June on U.S. budget talks and Greek aid discussions.  / BLOOMBERG FILE PHOTO/JIN LEE
STOCK FUTURES FALL after the S&P 500's largest weekly gain since June on U.S. budget talks and Greek aid discussions. / BLOOMBERG FILE PHOTO/JIN LEE

NEW YORK – U.S. stock futures fell, following the Standard & Poor’s 500 Index’s biggest weekly gain since June, as lawmakers prepared to debate the so-called fiscal cliff and euro-area finance ministers discuss Greek aid.
DreamWorks Animation SKG Inc. lost 5.4 percent as “Rise of the Guardians” opened in fourth place in U.S. and Canadian cinemas over the Thanksgiving weekend. Knight Capital Group Inc. jumped 12 percent after a person with direct knowledge of the matter said the trading firm expects to receive a takeover proposal. Yahoo! Inc. rose 1.6 percent as Goldman Sachs Group Inc. recommended the shares.
S&P 500 futures expiring in December fell 0.4 percent to 1,399.5 at 8:17 a.m. in New York, after the benchmark index jumped 3.6 percent last week. Dow Jones Industrial Average futures slid 49 points, or 0.4 percent, to 12,912 today.
“We were not expecting an easy and quick solution to this issue in Greece,” Lucy MacDonald, chief investment officer for equities at Allianz Global Investors in London, said in a Bloomberg Television interview. “They are moving forward, slowly, and that is the direction we think they will continue to go over the next couple of years. It’s not going to be an easy one.”
Congress returns from the Thanksgiving recess this week, seeking a budget deal to avoid $607 billion of automatic tax increases and spending cuts from kicking in next year. While Republicans favor raising federal tax revenue by limiting deductions, Democrats have pushed for higher rates on upper- income earners.
Budget wrangling
Senator Richard Durbin of Illinois, the second-ranking Democrat in the chamber, said yesterday on ABC’s “This Week” that any deal to reduce the budget deficit should allow the top tax rate to rise. Republican Senator John McCain of Arizona said on “Fox News Sunday” that he would be “very much opposed” to raising taxes and advocated closing “loopholes,” including limits on deductions for charitable giving and home mortgage interest payments.
The Congressional Budget Office has said a failure to avoid the fiscal cliff could lead to a recession and a jobless rate of about 9 percent, compared with the October rate of 7.9 percent.
“Fiscal-cliff negotiations are likely to be the immediate focus this week,” Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a report. “As a reminder of the gathering urgency there are only 36 days left until the fiscal cliff is due to kick-in, and from a practical stand point, exactly four weeks until the Christmas break to bridge the outstanding gap between the Democrats and Republicans.” Europe meeting
Euro-area finance ministers meet in Brussels for a third time this month to try to release an aid payment to Greece and produce a plan to keep the country a solvent member of the currency bloc. They failed to make the decisions in two previous meetings this month.
A breakthrough hinges on the ministers coming up with 10 billion euros ($13 billion) to fill the financing gap that emerged when Greece this month got two more years to meet deficit-reduction targets.
Also in the U.S., retailers are extending deals into Cyber Monday and beyond to try to sustain a 13 percent gain in Thanksgiving weekend sales. Spending in stores and online rose to $59.1 billion in the four days starting Nov. 22, the National Retail Federation said in a statement yesterday. A year ago, sales advanced 16 percent over the holiday weekend.
DreamWorks sank 5.4 percent to $17.07 after “Rise of the Guardians,” one of two releases this year from the Glendale, California-based company, opened with weekend sales of $24 million, Hollywood.com said. The movie was forecast to take in $32.1 million, according to BoxOffice.com.
Knight capital

Knight Capital jumped 12 percent to $2.80 after a person with direct knowledge of the matter said the company expects to receive acquisition proposals as early as this week.
The company with a market value of about $430 million was bailed out by six financial firms in August after losing $457 million in a trading error. Chicago-based Getco LLC, one of the rescuers, and Virtu Financial LLC in New York are among the likely bidders, said the person, who requested anonymity because the negotiations are private. The Wall Street Journal reported Nov. 23 that Knight expected offers for its market-making unit.
Yahoo gained 1.6 percent to $18.87 after Goldman Sachs added the biggest U.S. Web portal to its “conviction buy” list and raised its price estimate for the shares by 9.1 percent to $24.

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