U.S. stock-index futures tumbled as Chinese manufacturing growth slowed more than estimated and BP Plc’s failure to plug its leaking well in the Gulf of Mexico weighed on oil-services and energy shares.
Transocean Ltd. plunged 8.1 percent in early New York trading while Halliburton Co. fell 3.4 percent. Hewlett-Packard Co. slid 1.3 percent after saying it will take a $1 billion charge to cut 3,000 jobs. American International Group Inc. fell 3.2 percent on speculation the sale of its main Asian unit to Prudential Plc won’t proceed.
Standard & Poor’s 500 Index futures expiring in June fell 1.2 percent to 1,075.2 as of 12:37 p.m. in London, after earlier falling as much as 1.8 percent. The S&P 500 lost 8.2 percent in May, its worst month since February 2009, on concern Europe’s debt crisis will hamper the global economic recovery. U.S. markets were closed yesterday for the Memorial Day holiday. Dow Jones Industrial Average futures lost 1 percent to 10,023 and Nasdaq 100 Index futures decreased 0.9 percent to 1,836.25.
“The problem with the Chinese data is the bad timing,” said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees about $425 million in stocks. “It’s at a time when there are still debt problems in Europe. We’re in a context in which we lack visibility.”
Manufacturing Data
The nation’s Purchasing Managers’ Index slid to 53.9 from 55.7 in April, the Federation of Logistics and Purchasing said today. That was less than the median 54.5 estimate in a Bloomberg News survey of 18 economists. Readings above 50 indicate an expansion.
A gauge of manufacturing in the euro region dropped to 55.8 in May from 57.6 the previous month, Markit Economics said. That’s below an initial estimate of 55.9 released on May 21.
In the U.S., the Institute for Supply Management’s factory index fell to 59 last month from an almost six-year high of 60.4 in April, according to the median estimate in a Bloomberg News survey of 74 economists. The report is due at 10 a.m. New York time.
Figures from the Commerce Department may show construction spending rose 0.1 percent in April after a gain of 0.2 percent the prior month, according to economists’ estimates.
Hewlett-Packard
BP plunged as much as 17 percent in London trading after it abandoned an attempt to plug the leaking well in the Gulf of Mexico.
Transocean fell 8.1 percent to $52.15. Halliburton fell 3.4 percent to $23.99. Chevron Corp. lost 1.4 percent to $72.87 in Germany.
Hewlett-Packard slid 1.3 percent to $45.40 in New York. The company said it expects to cut 9,000 jobs and replace about 6,000 of those positions, recording costs of about $1 billion.
AIG fell 3.2 percent to $34.25 in New York. Prudential’s attempt to cut the price of its $35.5 billion takeover of AIG’s main Asian unit failed, leaving the biggest acquisition in the British insurer’s history in jeopardy.
Prudential was seeking to lower the price to $30.4 billion, the London-based insurer said in a statement today. New York- based AIG “will adhere to the original terms of its previously announced agreement with Prudential,” it said in a separate statement.
“It’s a dead deal,” said Paul Mumford, who helps manage 417 million pounds ($603 million) including Prudential shares at Cavendish Asset Management Ltd. in London. “The Pru will have to pull back gracefully now. It was a very costly mistake.”
Bank of America fell 0.8 percent to $15.61 in early New York trading. Citigroup Inc. slipped 1.5 percent to $3.90 in New York. Alcoa, the largest U.S. aluminum producer, slid 1.9 percent to $11.42 in Germany.
Freeport-McMoRan retreated 2.4 percent to $68.40 in New York as copper declined 3 percent in London.
Ev3 Inc., a medical device company, may gain. Covidien Plc agreed to buy ev3 for $2.6 billion in cash, or $22.50 a share. The stock closed at $18.92 during the last trading session.
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