U.S. Stock-Index Futures Little Changed; Red Hat Declines

Bloomberg: U.S. stock-index futures were little changed, after a three-day decline by the Standard & Poor’s 500 Index, as investors awaited a report on consumer confidence and speeches by two Federal Reserve officials.

Red Hat Inc. slumped 11 percent in pre-market New York trading after second-quarter billings at the largest seller of the Linux operating system trailed estimates. Applied Materials Inc.advanced 6.3 percent after agreeing to buy Tokyo Electron Ltd. for about $9.39 billion in stock.

S&P 500 futures expiring in December slipped less than 0.1 percent to 1,692.2 at 7:21 a.m. in New York. The benchmark gauge for U.S. equities has declined 1.4 percent in the past three trading sessions after reaching an all-time high of 1,725.52 as the Fed refrained from cutting stimulus. Contracts on the Dow Jones Industrial Average increased 5 points, or less than 0.1 percent, to 15,331 today.

“The Fed’s still driving the market,” Louis de Fels, a Paris-based fund manager at Raymond James Asset Management International, which oversees about $53 billion, said by telephone. “One president has said they may start tapering in October and some say quantitative easing must continue. The uncertainty of the timing has shaken the market.”

Fed Bank of Cleveland President Sandra Pianalto will deliver a keynote address at the Chicago Fed’s payments symposium at 8:30 a.m. local time. Fed Bank of Kansas President Esther George speaks at the conference at noon local time, after European markets close.

Asset Purchases

The Federal Open Market Committee said at its Sept. 17-18 meeting that it will continue to buy $85 billion of assets a month, surprising economists who had forecast a reduction. The S&P 500 has gained 6 percent this quarter and is up 19 percent for the year.

Stocks fell on Sept. 20 as Fed Bank of St. Louis President James Bullard said policy makers may decide to reduce their monthly bond purchases at the meeting in October.

A report at 10 a.m. New York time may show the Conference Board’s consumer-confidence index slipped to 80 this month from 81.5 in August, according to the median forecast of economists surveyed by Bloomberg.

Another release at the same time may show that manufacturing in the region covered by the Fed Bank of Richmond shrank this month. The factory index, which covers North Carolina, South Carolina, the District of Columbia, Maryland, Virginia and most of West Virginia, dropped to 12 from 14 last month, economists predicted in a Bloomberg survey.

Red Hat

Red Hat tumbled 11 percent to $47.70. Billings, a predictor of future revenue, rose 8 percent in the second quarter from a year earlier to $376 million. Analysts at CLSA had projected an increase of 17 percent, and Stifel Nicolaus & Co. predicted 14 percent growth.

Applied Materials advanced 6.3 percent to $16.99 as the largest supplier of chipmaking equipment said it will buy Tokyo Electron. Gary Dickerson, chief executive officer of Applied Materials, will become CEO of the combined company, which will be 68 percent owned by Applied Materials shareholders.

Facebook Inc. climbed 1.7 percent to $48 in early New York trading. Citigroup Inc.’s Mark Mayraised its recommendation on the social-network operator to buy from neutral, saying feedback from advertisers and agencies suggest that the growth seen in the second quarter is sustainable. May also boosted his price estimate by 72 percent to $55 a share.

Separately, the South China Morning Post reported on its website that China will lift the ban on Internet access to foreign websites considered politically sensitive to the government within the Shanghai Free-Trade Zone. The websites include Facebook, Twitter and the New York Times, SCMP reported, citing government officials.

reporter on this story: Inyoung Hwang in London