U.S. stock futures pared earlier gains Wednesday morning as the latest reading of U.S. third-quarter economic growth, while representing an upward revision, came in slightly below expectations and showed consumer spending rose less than previously thought.
Dow Jones Industrial Average futures were up 3 points at 11474 Wednesday morning, while Standard & Poor's 500 futures edged up less than a point to 1251 and Nasdaq Composite futures slipped 2 points to 2233. Prior to the data, Dow futures had been up 8 points, S&P 500 futures were up 1 point and Nasdaq futures were flat. Changes in stock futures do not always accurately predict early stock moves after the open.
Gross domestic product, the value of all goods and services produced, rose at a seasonally and inflation-adjusted annual rate of 2.6% in July through September, the Commerce Department said Wednesday. In the government's previous report of how the economy performed, released a month ago, GDP was estimated to have increased by 2.5% in the third quarter.
But Wednesday's number, the third and final one made by the government for the July through September period, missed economists' expectations for GDP to have risen by a higher 2.9%. The main revisions were to consumer spending, which rose by less than previously estimated, and to company inventories, which increased by more than previously thought.
Meanwhile, gauges measuring inflation were even more muted than previously thought. The government's price index for personal consumption showed a 0.8% rise July through September, compared to a previously estimated 1.0% increase and following a flat reading in the second quarter.
The Federal Reserve's preferred gauge -- the PCE price index excluding volatile food and energy items -- rose at an annual rate of just 0.5% in the third quarter, the lowest since quarterly records began in 1959. That's lower than the original estimate of a 0.8% increase and down from the second quarter's 1.0% increase.
The euro edged up to $1.3104, boosted by reports that China is prepared to buy EUR4 billion to EUR5 billion of Portuguese debt. The Chinese endorsement comes a day after Moody's Investors Service warned it may lower Portugal's credit rating as much as two notches, dealing another blow to investor confidence in the euro zone.
The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, slipped 0.1%. Treasurys were also lower, lifting the yield on the 10-year note up to 3.33%.
Crude-oil futures climbed above $90 a barrel ahead of government inventory data. The American Petroleum Institute, an industry group, Tuesday reported a big drop of 5.8 million barrels in U.S. crude stocks for last week. Gold futures also edged higher.
Among stocks in focus, Walgreen jumped 6.2% in premarket trading after the drugstore operator posted a 19% increase in fiscal first-quarter earnings, with Chief Executive Greg Wasson citing cost controls and a slowing of new-store openings. The company posted higher prescription sales and said the front of the store saw "significant increases" due to improved merchandising.
Nike slipped 5.3% premarket. Emerging middle class consumers in countries from China to Brazil helped propel a 22% increase in the company's fiscal second-quarter earnings, but Nike warned that for the next three or four quarters it expects higher costs for labor, cotton and transportation. To offset the costs the company said it intended to minimize discounts and increase prices on high demand products.
Still to come, data on existing-home sales are due at 10 a.m. EST.
-By Donna Kardos Yesalavich, Dow Jones Newswires; 212-416-2188; donna.yesalavich@dowjones.com
Among the companies whose shares are expected to actively trade in Wednesday's session are Nike Inc. (NKE), Walgreen Co. (WAG) and Xilinx Inc. (XLNX).
Nike's fiscal second-quarter earnings rose a better-than-expected 22%, as the athletic-shoe maker continues to see strong interest in future orders. But shares were down 5.4% to $87.30 premarket, likely on concerns about rising costs and worse-than-expected future orders.
Walgreen's fiscal first-quarter earnings rose a much bigger-than-expected 19% as Chief Executive Greg Wasson said the drugstore operator benefited from cost controls and its slowing of new-store openings. Shares climbed 6.2% to $39.10 premarket.
Programmable-chip maker Xilinx slashed its third-quarter sales view, forecasting sales for the period will drop 7% to 9% sequentially because of weaker-than-expected demand from some of its large communications customers in the wireless segment. Shares dropped 4% to $27.27 in premarket trading, and its competitor Altera Corp. (ALTR) lost 2.9% to $34.76.
Berkshire Hills Bancorp Inc. (BHLB) agreed to acquire smaller peer Legacy Bancorp Inc. (LEGC) in a nearly $110 million deal that will further bolster its presence in western Massachusetts and neighboring New York. Berkshire also anticipates fourth-quarter earnings meeting or exceeding prior guidance. Shares in Legacy jumped 46% to $12.58 premarket.
Apparel company Oxford Industries Inc. (OXM) said it has bought upscale women's lifestyle brand Lilly Pulitzer for an undisclosed amount. Shares Oxford were up 3.9% to $23.03 in premarket trading.
Software giant Microsoft Corp. (MSFT) is planning to roll out a version of its Windows operating system that will compliment chips designed by U.K.-based ARM Holdings PLC (ARMH), according to media reports. American depositary shares of ARM rose 3.4% to $20.45 premarket, while Microsoft inched up 0.1% to $28.11.
Tibco Software Inc.'s (TIBX) fiscal fourth-quarter earnings rose 18% in results that beat the business-software company's upbeat guidance. Shares were up 4.8% to $22.20 premarket, as the company also increased the amount of shares it may repurchase.
Lindsay Corp.'s (LNN) fiscal first-quarter earnings fell a much bigger-than-expected 36% as the irrigation systems and infrastructure company reported weaker margins and higher operating costs. Shares fell 6.2% to $63.37 premarket.
Arena Pharmaceuticals Inc. (ARNA) and Eisai Inc. said they completed an end-of-review meeting on their obesity treatment lorcaserin with the U.S. Food and Drug Administration, and the companies have clarity on the next steps toward approval. Arena said it expects to resubmit its application for lorcaserin by the end of 2011. Arena shares 1% premarket to $2.08.
Sino Clean Energy Inc. (SCEI) said its planned offering of at least 5.5 million common shares priced at $5.25 each, a 7.4% discount to Tuesday's closing price. Shares of the China-based company, which produces a coal water mixture that is mainly used to fuel boilers and furnaces, slid 3% to $5.50 in premarket trading.
Gaming company Activision Blizzard Inc. (ATVI) said its war-reenactment game "Call of Duty: Black Ops" has crossed the $1 billion mark, just a month after its release. Activision said users have spent 600 million hours playing the game. Shares rose 1.8% to $12.45 premarket.
Corcept Therapeutics Inc. (CORT) announced positive results from its Phase 3 study of Corlux for the treatment of Cushing's Syndrome, news that sent the biotechnology company's shares up 12% to $4.68 premarket.
Red Hat Inc.'s (RHT) fiscal third-quarter earnings rose 59%, with revenue topping its own estimate, as sales and margins improved. Still, shares fell 1.5% to $47.14 premarket.
Nova Measuring Instruments Ltd. (NVMI), an Israel-based metrology-systems company, said a major foundry recently placed $10 million in orders for the company's integrated and standalone metrology tools. Shares rose 3.4% to $8.17 premarket.
Zoom Technologies Inc. (ZOOM), a China-based manufacturer of mobile phones, guided for record 2011 results, saying it expects 30% growth in both revenue and net income compared to the company's previously stated 2010 guidance. Shares jumped 30% premarket to $4.97.
Cumberland Pharmaceuticals Inc. (CPIX) declined after saying the U.S. Food and Drug Administration has asked for additional work before it could approve a new version of the specialty pharmaceutical company's liver failure drug Acetadote. Shares fell 17% to $5.75 premarket.
Hovnanian Enterprises Inc. (HOV) narrowed its fiscal fourth-quarter loss as the home builder saw lower land-related charges than a year earlier, though revenue and contracts slid. Shares fell 6.4% to $4.08 after hours.
Watch List:
Aeropostale Inc. (ARO) promoted a new chief financial officer as it unveiled a number of executive changes Tuesday, the reshuffling coming after co-Chief Executive Mindy Meads announced her departure earlier this month.
Cintas Corp.'s (CTAS) fiscal second-quarter earnings fell 2.3%, though they met analysts' estimates, as the uniform and business-supply company's revenue rose but costs also increased.
Enzon Pharmaceuticals Inc. (ENZN) said it has put in place a new $200 million stock-buyback authorization after it exhausted its last one.
Finish Line Inc.'s (FINL) fiscal third-quarter earnings fell as a prior-year gain from ending a takeover masked better-than-expected results. Shares in the athletic outfitter were down 1.5% at $18.50 in after-hours trading.
Jazz Pharmaceuticals Inc. (JAZZ) won a new patent for sleep-disorder treatment Xyrem, its marquee drug, as a narcolepsy solution.
Progress Software Corp.'s (PRGS) fiscal fourth-quarter earnings rose 28%, topping its own target, as sales improved. The company also said its board has approved a three-for-two stock split that will be accomplished via dividend "to obtain wider distribution and greater liquidity" for the stock.
Smith & Wesson Holding Corp. (SWHC) said it has named Jeffrey D. Buchanan as its new chief financial officer, filling a position left empty when William Spengler said in October he was taking a job with another company.
Vertex Pharmaceuticals Inc. (VRTX) eliminated one of the four remaining arms of a midstage study of its lead hepatitis-C treatment candidate, telaprevir, which combined its application with another developmental treatment for the virus.
