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Futures Tumble On 'Cliff' Worries; Research In Motion (RIMM) Plunges

 December 21, 2012 09:15 AM

(By Balachander) U.S. stock-index futures pointed to a sharply lower opening on the Wall Street, weighed by a fresh impasse in negotiations to address the looming "fiscal cliff".

Mini Dow Industrial Average futures dropped 177 points to 13,090. The Nasdaq futures shed 41.25 points to 2,648.75. Standard and Poor's 500 futures retreated 20.20 points to 1,420.40.

On Thursday, U.S. stocks closed higher as investors awaited developments of talks in Washington to avert the fiscal crisis and a set of positive economic data also weighed on the sentiment.

President Barack Obama and U.S. House Speaker John Boehner are negotiating to address the so-called "fiscal cliff" of roughly $600 billion in spending cuts and tax increases set to begin in January.

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The White House has already threatened to veto a Boehner proposal, which allows tax increases on those earning over $1 million.

Boehner tax plan failed to get support from his party on Thursday.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," Boehner said in a statement late Thursday.

On the data front, durable-goods orders for November rose 0.7 percent, versus economists expectations of an increase of 0.2 percent. New orders - excluding transportation - unexpectedly rose 1.6 percent, while expectations were for a 0.2 percent decline. Durable-goods orders measures the change in the total value of new orders for long lasting manufactured goods.

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November U.S. personal income and spending increased 0.6 percent and 0.4 percent, respectively, a data from the Bureau of Economic Analysis showed. Economists expected a 0.3 percent increase in income and spending. In October, personal income increased slightly and personal spending fell 0.1 percent.

Reuters and the University of Michigan's consumer sentiment index for December is expected to inch up to 74.7 from the mid-month reading of 74.5.


In corporate news, Research In Motion Ltd. (NASDAQ: RIMM) plunged 13.10 percent in premarket after the BlackBerry maker posted a drop in its subscriber numbers and forecast an operating loss for the fourth quarter.

Apple Inc. (NASDAQ: AAPL) fell 1.81 percent in premarket. The U.S. Patent and Trademark Office reportedly rejected the company's "pinch-to-zoom" patent in a preliminary ruling.

NIKE Inc. (NYSE: NKE) added 3.12 percent in premarket after the footwear maker posted quarterly earnings that beat Wall Street estimates.

Walgreen Co. (NYSE: WAG) shed 2.48 percent in premarket after the drugstore chain reported a drop in earnings for the first quarter amid a decline in comparable store sales and prescriptions filled.

Red Hat Inc. (NYSE: RHT) gained 4.83 percent in premarket after the open source software provider posted better-than-forecast revenue for the third quarter.

Micron Technology Inc. (NASDAQ: MU) dropped 4.57 percent in premarket after the chip maker posted a first-quarter loss amid a 14 percent drop in sales. Results fell short of market expectations.

Ameristar Casinos Inc. (NASDAQ: ASCA) agreed to be acquired by Pinnacle Entertainment Inc. (NYSE: PNK) for $26.50 per share in cash. In premarket, ASCA shares jumped 16.90 percent and PNK shares gained 4.57 percent.

Halozyme Therapeutics Inc. (NASDAQ: HALO) surged 18.12 percent in premarket after the company agreed with Pfizer Inc. (PFE) to develop and commercialize products combining proprietary Pfizer biologics with Halozyme's Enhanze technology.

Transcept Pharmaceuticals Inc. (NASDAQ: TSPT) may be active after the company said a mid-stage trial evaluating the efficacy and safety of TO-2061 as adjunctive therapy for obsessive compulsive disorder did not meet primary endpoint.

FirstCity Financial Corp. (NASDAQ: FCFC) may be in focus after the company agreed to be bought by certain funds managed by Varde Partners Inc. for $224.9 million, including debt.

Global Markets

European markets traded lower, with Germany's DAX losing 0.59 percent to trade at 7,626.27. France's CAC40 fell 0.41 percent to trade at 3,651.62. The U.K.'s FTSE 100 shed 0.64 percent to trade at 5,919.69.

Asian markets ended in red, with China's Shanghai Stock Exchange Composite Index down 0.69 percent to finish at 2,153.31. Japan's Nikkei 225 lost 0.99 percent to close at 9,940.06. Hong Kong's Hang Seng Index fell 0.68 percent to end at 22,506.29. India's BSE Sensex ended at 19,242, down 1.09 percent.

Commodity & Currency Scan

Ahead of the opening bell, crude oil futures tumbled 1.35 percent to $89.51 per barrel. Gold futures inched up 0.22 percent to $1,649.50 per ounce.

In the currency market, the euro slid 0.29 percent against the U.S. dollar to 1.3205, and the British pound declined 0.33 percent to 1.6225. The dollar shed 0.45 percent against the Japanese yen to 84.0100.



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