U.S. stock futures little changed before jobs data

S&P heads for a weekly gain as October's jobs report expected to add to signs of strength in the U.S. economy

Nov 7, 2014 @ 7:22 am

By Bloomberg News

U.S. stock-index futures were little changed, with the Standard & Poor's 500 Index heading for a weekly gain, as investors awaited data that is projected to show an increase of more than 200,000 in October payrolls.

Bank of America Corp. fell in early New York trading after taking legal charges that wiped out the surprise profit it reported last month. Walt Disney Co. dropped 1.8% after saying profit at TV networks, its biggest division, fell, even as total earnings beat forecasts. Zynga Inc. and King Digital Entertainment Plc rallied after reporting quarterly sales that topped estimates.

Futures on the S&P 500 (SPX) expiring in December fell 0.1% to 2,026.9 at 11:36 a.m. in London. The equity gauge is up 0.7% this week, heading for a third straight weekly gain, after election results shifted control of the Senate from Democrats to Republicans, and the European Central Bank vowed to increase stimulus efforts if needed. Dow Jones Industrial Average contracts retreated two points, less than 0.1%, to 17,502 today.

“The U.S. is now data driven,” said John Plassard, vice president at Mirabaud Securities LLP in Geneva. “I expect good figures from the employment report that will confirm that the Fed did a good thing in ending quantitative easing. But one of the consequences from that is that expectations for a rate hike in the first half of 2015 will lift higher.”

Payrolls Data

A report at 8:30 a.m. Washington time may show non-farm payrolls rose by 235,000 in October, according to the median of economists' estimates compiled by Bloomberg. That would see the continuation of monthly gains of more than 200,000, after payrolls climbed by 248,000 in September. The jobless rate probably held at a six-year low of 5.9% in October, the survey signaled.

The October payrolls report comes amid signs of strength in the U.S. economy, with data yesterday showing fewer Americans than analysts projected filed for unemployment benefits.

Bank of America lost 0.6% to $17.25. The lender posted a loss of $232 million, or 4 cents a share, for the three months ended Sept. 30. U.S. regulators faulted systems and controls for currency trading and called for fines and remedial actions in draft documents sent late last month, the firm said yesterday in a quarterly report.

Disney dropped 1.8% to $90.39. TV networks posted slightly lower profit of $1.437 billion, reduced by higher costs at ESPN and marketing expenses at the Disney Channel overseas. The world's largest entertainment company said profit excluding some items rose to 89 cents a share, beating the 88-cent average of estimates compiled by Bloomberg.

Salix Tumbles

Salix Pharmaceuticals Ltd. tumbled 42% to $80.34. The drugmaker said its chief financial officer resigned, and the audit committee will review the way the company characterized wholesale inventory.

Transocean Ltd. slid 7.9% to $27.55. The offshore driller said in a statement that it will take $2.76 billion in impairment charges. The Vernier, Switzerland-based company also delayed its earnings announcement scheduled for today, without giving a new date.

Zynga jumped 11% to $2.62. While third-quarter sales fell to $176.6 million, they exceeded the $166.6 million average of analysts' estimates compiled by Bloomberg. The loss for the quarter narrowed to 1 cent a share excluding items, in line with estimates.

King Digital rallied 6.3% to $14.02. While total revenue fell 17 percent to $514.4 million from a year earlier, it beat analyst estimates for $491.1 million. 49% of third-quarter bookings came from games other than Candy Crush, compared with 41% a year earlier.

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