US STOCKS-Wall Street set to dip at open on growth concerns

Mon May 19, 2014 8:56am EDT

* AstraZeneca rejects sweetened Pfizer offer

* AT&T to buy DirecTV for $48.5 billion

* Futures off: Dow 42 pts, S&P 4 pts, Nasdaq 6.5 pts (Adds Campbell Soup earnings, updates prices)

By Chuck Mikolajczak

NEW YORK, May 19 (Reuters) - U.S. stocks were set to dip at the open on Monday, on the heels of back-to-back weekly declines for the S&P 500 as investors grew cautious over stock valuations with indexes near record levels amid mixed economic data.

* U.S. listed shares of AstraZeneca slumped 8.8 percent to $73.20 in premarket trade after the British drugmaker rejected a sweetened and "final" merger offer from Pfizer which would have created the world's largest pharmaceuticals group. Pfizer shares advanced 1.7 percent to $29.60 before the opening bell.

* AT&T lost 2.5 percent to $35.83 in premarket trade after the telecom company said it will acquire DirecTV for $48.5 billion, highlighting AT&T's pressing need for fresh avenues of growth beyond the maturing U.S. cellular business. DirecTV shares lost one cent at $86.17 in premarket.

* Equities have come under pressure recently, with consecutive weekly declines for the first time since January as investors have become leery of growth prospects as a result of mixed economic data.

* Small-cap stocks, often seen as the first beneficiary of growth, have tumbled. The small-cap Russell 2000 index has several times approached correction territory, defined as a decline of 10 percent from a recent high, only to bounce back slightly.

* The defensive posture by investors has been reflected by a sector rotation into groups such as utilities, telecoms and energy, which have outperformed the broader S&P 500 over the past three months.

* S&P 500 e-mini futures lost 4 points and were slightly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average e-mini futures declined 42 points and Nasdaq 100 e-mini futures lost 6.5 points.

* Campbell Soup Co fell 4.8 percent to $42.95 in premarket after the world's largest soup maker posted weaker-than-expected quarterly sales and cut its full-year sales guidance.

* Earnings season will effectively draw to a close this week, with 23 companies scheduled to report, including retailers Home Depot and Lowe's Cos.

* Of the 464 companies in the S&P 500 that have reported earnings through Friday, 69.2 percent beat expectations, above the long-term average of 63 percent and the 66 percent average over the past four quarters. (Editing by Bernadette Baum)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.