By Steve Goldstein, MarketWatch
Last Updated: 8:37 AM ET Dec 22, 2005
(MarketWatch) -- U.S. stock market futures were flattish Thursday as
consumer spending in November grew as expected with a slightly lower-than-
forecast growth in personal income, while crude oil futures rose and
Albertson's reportedly stopped deal talks.
S&P 500 futures rose 1.2 points at 1,271.1 while Nasdaq 100 futures were
up 1 point at 1,685.0.
On Wednesday, U.S. stocks ended with gains but off intraday highs. Dow
industrials rose 28 points at 10,833, the Nasdaq Composite rose 9.2 points at
2,231 and the S&P 500 rose 3.2 points at 1,262.
Front-month crude oil contracts hovered around $59 a barrel, amid larger-
than-expected drawdown of distillate stocks and as Royal Dutch Shell declared
a force majeure in Nigeria as an explosion earlier in the week curtained its
production in the country by 180,000 barrels a day.
Thursday will see the release of a number of economic indicators, though
none are considered particularly important.
U.S. consumer spending grew 0.3% in November, matching a 0.3% gain in
incomes, the Commerce Department said Thursday.
Economists were expecting incomes to rise 0.4% in November, with spending
up 0.3%, according to a MarketWatch survey.
First-time applications for state unemployment benefits fell by 13,000 to
a seasonally adjusted 318,000 in the week ending Dec. 17, the Labor Department
said Thursday. Initial claims filed in the previous week were revised higher
by 2,000 to 331,000. Economists were expecting jobless claims to dip to
326,000.
At 10 a.m., the Conference Board will release its leading indicators
index, expected to show growth of 0.4% for November.
The pound declined 0.6% on the dollar on a wider-than-forecast third
quarter U.K. current account deficit, while the euro and yen traded in a tight
range against the greenback.
Of companies in focus, Albertson's slumped 8% in pre-open trade after The
New York Times reported that the supermarket operator has broke off talks with
a consortium that offered $9.6 billion. CVS Corp., Supervalu , Kimco Realty
Trust and unlisted Cerberus Capital Management composed the bidders, the
report said.
CVS issued out a statement saying it's inadvertently invited analysts to a
conference call as it hasn't struck an agreement with Albertson's on the
company's Sav-on and Osco drugstores. But it didn't say that talks have broken
off.
Arden Realty agreed to be acquired by General Electric in a deal valued at
$4.8 billion, including the assumption and refinancing about $1.6 billion in
outstanding debt. The agreement calls for GE Real Estate to buy all of Arden's
outstanding common shares for $45.25 in cash. Talks between the parties were
reported in Wednesday's editions of The Wall Street Journal. In connection
with the deal, GE agreed to sell a portfolio of 13 Arden properties in
Southern California to Trizec Properties for about $1.6 billion.
Eli Lilly & Co. said it's writing off $170 million to $190 million in the
fourth quarter on asset impairments, though adjusted earnings should meet
analyst forecasts.
Bristol-Myers Squibb said it has reached an agreement with Merck & Co. to
end their collaboration on muraglitazar, an investigational oral drug for the
treatment of type 2 diabetes. Under the mutually brokered agreement, all
rights to the drug return to Bristol-Myers Squibb. The deal also covers the
reversion to Bristol-Myers of a back-up compound to muraglitazar.
The European Commission told Microsoft Corp it faces a 2 million euros-a-
day fine if it doesn't do more to comply with its 2004 antitrust punishment.
Of earnings released late Wednesday, Blackberry maker Research In Motion
posted adjusted earnings and sales ahead of broker forecasts, while
semiconductor making Micron Technology missed earnings estimates for its
fiscal first quarter.
Overseas, traders took some profits in Tokyo, where the Nikkei 225 ended
lower, while European equities sagged despite some mergers-and-acquisitions
speculation.
Broker calls
Merrill Lynch upgraded insurance holding company Genworth Financial, Inc.
to buy from neutral, saying the passage of the deficit reduction bill in the
Senate suggests federal legislation encouraging the purchase of long-term care
insurance coverage is close. The broker told clients that although legislation
will not lead to an immediate increase in sales, the impact of similar long-
term care "partnership programs" in four states provide reason for optimism.
J.P. Morgan cut Komag, Inc., a supplier of thin-film media for disk
drives, to underweight from neutral, saying Seagate Technology's acquisition
of Maxtor Corp. fuels long-term risks for Komag. The broker told clients it
expects Komag to be a loser in the changing hard-disk drive industry.
This MarketWatch update is provided courtesy of Thomson Financial.
This is Thomson Financial's Market Commentary, which is issued three times
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The information herein is believed to be true and accurate. We take no
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SOURCE Thomson Financial Corporate Group
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