US Stock Futures In Red As Retail Sales Disappoint




U.S. stock futures remained lower Friday morning following a smaller-than-expected gain in U.S. retail sales for December while another round of tightening from China also weighed.

Dow Jones Industrial Average futures were recently down 46 points at 11637, while Standard & Poor's 500 futures fell 6 points to 1276 and Nasdaq Composite futures slipped 4 points to 2299. Prior to the data, Dow futures had been down 48 points, while S&P 500 futures were off 6 points and Nasdaq futures were down 4 points. Changes in U.S. stock futures do not always accurately predict early stock moves after the open.

U.S. retail sales posted a gain of 0.6% in December, the sixth-straight increase, but the rise was smaller than expected as high unemployment weighed on the minds of holiday shoppers. Economists had expected a 0.9% increase.

Separate data showed U.S. consumer prices in December surged to the fastest pace since June 2009, although the rise was driven by strong energy prices, which tend to be volatile. The seasonally adjusted consumer price index last month increased by 0.5% from November, the Labor Department said Friday. For the full 2010, consumer price inflation rose 1.5%.

So-called core inflation, which excludes energy and food prices and is closely watched by the Federal Reserve, rose by only 0.1%. Economists had expected consumer prices to rise by 0.5% and core CPI to gain 0.1%.

Overseas, China's central bank said it will raise banks' reserve-requirement ratio by half a percentage point, following six such increases last year, in the government's latest move to curb inflation. The move sparked worries over how further tightening from China could impact global demand and growth.

However, the euro leapt to 1.3363 as worries about euro-zone debt continued to ease. The German government remains "absolutely convinced" that the size of the rescue fund for troubled euro-zone countries doesn't need to be boosted, government spokesman Steffen Seibert said Friday.

Still, data showed the euro-zone's annual rate of inflation rose above the European Central Bank's medium-term target for the first time in more than two years in December, driven by fuel, food, alcohol and tobacco prices. The figures are likely to fuel concerns that interest rates could rise sooner than expected after ECB President Jean-Claude Trichet warned Thursday that inflation may increase in the short term but should moderate later this year.

The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, edged up 0.1%. Treasurys were lower, lifting the yield on the 10-year note up to 3.33%. Crude-oil futures slipped while gold futures also fell.

Among companies in focus, J.P. Morgan Chase posted a 47% jump in fourth-quarter profit, beating analysts' expectations as revenue increased and the banking giant sharply reduced its loan-loss reserves. Still, the stock slipped 0.3% in premarket trading.

Intel rose 0.9% premarket. The company's fourth-quarter earnings rose 48%, topping analysts' views, as the chip-making giant's sales and margins rose.

-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 Friday's session are Coinstar Inc. (CSTR), Intel Corp. (INTC) and J.P. Morgan Chase & Co. (JPM).

Coinstar shares fell 27% pre-market to $41.84 after it slashed its financial outlook for the fourth quarter and current year as results were hurt by weak holiday rentals and the delay it has had to put on some new DVD releases. The company, which operates coin-counting stations and redbox DVD-rental kiosks, said it has been relying more on the latter business for growth recently.

Intel reported yet another record quarter--and projected better-than-expected first-quarter revenue and margins--as the semiconductor maker continues to benefit from strong demand from businesses. Shares rose 1.1% to $21.53 in pre-market trading.

J.P. Morgan's fourth-quarter profit jumped 47%, beating analysts' expectations, as revenue increased and it continued to set aside less to cover potential credit losses. But shares slipped 0.6% to $44.17 in pre-market trading.

Toy maker Hasbro Inc. (HAS) projected fourth-quarter revenue slightly below analysts' expectations and predicted "modest" earnings growth for the year. Shares fell 4.8% to $42.51 pre-market.

Sterling Bancshares Inc. (SBIB), which is facing a proxy fight from its largest shareholder, has put itself on the auction block, The Wall Street Journal reported, citing people familiar with the situation. Bids were due late Thursday, and a sale of the company is expected to be announced as early as next week, these people said. Shares gained 5.6% to $7.90 in pre-market trading.

Dendreon Corp. (DNDN) unveiled plans to offer $500 million in notes convertible to cash and shares of stock or a combination thereof. Shares were down 2.2% at $35.80 in pre-market trading on the possibility of share-value dilution. The biotechnology company, which specializes in cancer vaccines, has a market capitalization of about $5.4 billion.

Shares of Cumberland Pharmaceuticals Inc. (CPIX) jumped after the pharmaceutical company disclosed it won Food and Drug Administration approval for a new formula of Acetadote, an injectable treatment for non-acetaminophen acute liver failure. The company's stock surged 18% to $6.70 in pre-market trading.

Local.com Corp. (LOCM) said it plans to offer 4 million shares of its stock in an offering to the public. The company, which operates a network of local search websites, didn't specify at what price it planned to sell the shares. Local.com, the latest company to tap equity markets for cash, has about 17.2 million shares outstanding. Shares fell 8% to $4.52 in pre-market trading.

RBC Capital Markets raised its stock-investment rating on for-profit education company Corinthian Colleges Inc. (COCO) to outperform from underperform after meeting with the company's new chief executive. The firm said it expects Jack Massimino, who previously served as Corinthian's chairman and before that CEO, will leverage his experience in running public companies to develop a rehabilitation plan that stabilizes enrollment and addresses the company's perilous regulatory position. Shares gained 5.9% to $5 in pre-market trading.

Watch List

Alliant Energy Corp. (LNT) boosted its quarterly dividend by 7.6%, a move that will cost the company an extra $3.3 million a quarter.

Alpha Natural Resources Inc. (ANR) raised its 2011 shipment target for the high-margin coal used by steel makers, expecting to benefit from Australian flooding that has disrupted the market.

AOL Inc. (AOL) detailed new content partnership agreements with real-estate search site Move Inc. (MOVE) and two other online companies, as the Internet company continues to add to the original content it offers to attract users.

M&T Bank Corp.'s (MTB) fourth-quarter profit jumped 49%, topping analysts' estimates as revenue rose and it set aside less to cover credit losses.

Mitel Networks Corp. (MITL) on Thursday named Danaher Corp. (DHR) executive Richard McBee as its chief executive, succeeding the retiring Don Smith. Mitel, which sells Internet-based communications items as well as applications that integrate voice, video and data communication with business programs, said McBee's new role is effective Monday.

Reynolds American Inc. (RAI) said it has agreed to sell its Lane Ltd. roll-your-own and pipe tobacco unit to Denmark's Scandanavian Tobacco Group A/S for $205 million.

Sealy Corp. (ZZ) swung to a fiscal fourth-quarter loss on an income-tax provision expense and a loss from discontinued operations related to the mattress maker's European and Brazilian businesses, although sales and margins grew.

Shuffle Master Inc.'s (SHFL) fiscal fourth-quarter earnings fell 9.1% mostly because of legal-settlement charges. The gambling-products supplier's adjusted results were better than expected.

United Technologies Corp. (UTX) agreed to sell its British manned guarding business to an affiliate of Sweden-based Securitas AB as the manufacturing company moves to focus more on its high-technology security business. Terms weren't disclosed.