ECONOMIC INDICATORS

U.S. stock futures advance amid government budget negotiations

BLOOMBERG FILE PHOTO/JIN LEE
U.S. STOCK FUTURES advanced as lawmakers prepared for more budget talks.
Posted 12/4/12

NEW YORK - U.S. stock futures advanced, following yesterday’s decline in the Standard & Poor’s 500 Index, as U.S. leaders prepared for more budget talks.

Corning Inc., the largest maker of glass for flat-panel televisions, rose 0.8 percent as Sanford C. Bernstein & Co. recommended the shares. SunPower Corp., a U.S. solar panel maker, added 1.1 percent after extending a supply deal with Japan’s Toshiba Corp. through 2018. Las Vegas Sands Corp. and Wynn Resorts Ltd. dropped at least 1.3 percent, joining a slump in Macau casinos on bets China may increase scrutiny of junket operators, who provide credit to high-stake gamblers.

S&P 500 futures expiring this month increased 0.1 percent to 1,408.50 at 8:31 a.m. New York time. Dow Jones Industrial Average futures advanced 16 points, or 0.1 percent, to 12,966 today. The number of shares changing hands in Stoxx Europe 600 Index’s companies was 7.3 percent below the 30-day average at this time of day, according to data compiled by Bloomberg.

“The fiscal cliff is generating volatility,” said Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg, in a phone interview. “For the market to rise, we need to have good news regarding the fiscal cliff. It’s a concern that needs to be resolved.”

U.S. President Barack Obama’s administration rejected a Republican plan for tackling the fiscal cliff that omitted higher tax rates for top-earning Americans, leaving the issue unresolved with about four weeks left before more than $600 billion in tax increases and federal spending cuts start taking effect. European stocks rose as finance ministers met to discuss moves to stem the debt crisis.

Lower growth

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said structural headwinds may reduce real growth below 2 percent in the U.S. and other developed economies. Investors should anticipate annual returns of 3 percent to 4 percent from bonds at best and equity returns only a few percentage points higher, Gross wrote today.

With economies going through changes, investors should seek returns from commodities such as oil and gas, U.S. inflation- protected bonds, high-quality municipal debt and non-dollar emerging market stocks, Gross reiterated in his monthly investment outlook posted on the Newport Beach, California-based company’s website.

Corning added 0.8 percent to $12.25. It was rated overweight in new coverage at Sanford C. Bernstein, which said the company has consistently higher margins that can be sustained.

SunPower gained 1.1 percent to $4.68. Under the accord, SunPower will provide more than 100 megawatts of its highest- efficiency residential solar panels annually to Toshiba, the San Jose, California-based company said in a statement today. Toshiba will sell solar systems that use SunPower’s modules.

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