Adam Sarhan WSJ Quote: US Stock Futures Fall

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TOMI KILGORE And
TOMMY STUBBINGTON
Feb. 13, 2014 8:19 a.m. ET
NEW YORK—U.S. stock futures fell, as disappointing results from Cisco Systems and losses in overseas markets prompted a pullback.

European markets declined, and were headed for the first loss in seven sessions, with rising political tensions in Italy giving investors reason for caution.

About 90 minutes ahead of the open, Dow Jones Industrial Average futures declined 69 points, or 0.4%, to 15874. On Wednesday, the Dow fell 31 points, or 0.2%, to snap a four-session win streak.

S&P 500 index futures gave up nine points, or 0.5%, to 1808 and Nasdaq-100 futures lost 19 points, or 0.5%, to 3605. Changes in stock futures don’t always accurately predict stock moves after the opening bell.

The S&P 500 slipped less than 0.1% on Tuesday, after running up 4.5% since hitting a 3½-month low on Feb. 3.

Adam Sarhan, chief executive of New York-Based investment firm Sarhan Capital, said the market is just “consolidating quietly” after a strong rebound off last week’s lows. And Cisco’s disappointment is a continuation of lackluster investor response to earnings reports over the past few weeks.

“The market can take a breather,” Mr. Sarhan said. “It’s perfectly normal and healthy for the market to pause to digest some gains.”

He said the fear trade that prompted the selloff in January, as a result of worries over economic growth and emerging-market turmoil, has eased substantially. “This is a normal pullback within a broader uptrend, with a positive economic backdrop.”

Cisco slumped 3.9% in premarket trading after the network-equipment maker reported a drop in fiscal second-quarter revenue, led by weakness in its core switching and routing businesses, and said emerging markets remain challenged. The company also raised its quarterly dividend by 12%.

On the upside, Time Warner Cable jumped 9.3% after agreeing to be acquired by Comcast for about $45.2 billion in stock. Comcast slid 2.5%.

At 8:30 a.m. ET, retail sales for January are expected to show a decline of 0.1% on the month, or an increase of 0.1% when excluding auto sales. At the same time, initial claims for jobless benefits in the latest week are forecast to have risen to 331,000.

New Federal Reserve Chairwoman Janet Yellen‘s second-day of testimony to Congress was postponed late Wednesday because of the snowstorm affecting much of the East Coast.

The yield on the 10-year Treasury note was little changed at 2.764%.

Gold futures eased 0.3% to $1,290.60 an ounce, after rising for a sixth-straight session Wednesday, while crude oil futures lost 0.7% to $99.72 a barrel to pull back from Wednesday’s fourth-month high. The dollar lost ground against the yen and the euro.

In Europe, the Stoxx Europe 600 shed 0.6%, after rising 4.5% over the past six sessions.

Italy’s FTSE MIB led declines, falling 1.1%, amid a renewed bout of political wrangling between Prime Minister Enrico Letta and Matteo Renzi, the newly elected leader of Mr. Letta’s Democratic Party, leaving the country’s left-right coalition government at risk of collapse. Italian bond yields have risen from the multiyear lows they hit on Wednesday.

Germany’s DAX 30 index gave up 0.2%, France’s CAC 40 dropped 0.3% and the U.K.’s FTSE 100 lost 0.6%.

Asian markets were broadly lower. Japan’s Nikkei Stock Average shed 1.8% as a strengthening in the yen weighed on exporter stocks. China’s Shanghai Composite lost 0.6%, pulling back from a 2014 high on Wednesday.

 

Source: http://online.wsj.com/news/articles/SB10001424052702304703804579380631392597664?KEYWORDS=adam+sarhan

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